Eagle Rock to add cryogenic processing in Texas Panhandle

By OGJ editors
HOUSTON, Feb. 16
-- Eagle Rock Energy Partners LP will deploy a currently idle high-efficiency cryogenic plant to its operations in the Texas Panhandle to increase efficiency and accommodate volume growth from the Granite Wash play, the company has announced.

Deployment of the plant in replacement of an aging facility is Phase 2 of the Eagle Rock Energy’s Texas Panhandle consolidation and processing capacity expansion announced in February 2008.

Phased project
Phase 1, completed in October 2008, consisted of shutting down the company’s Stinnett plant in Moore County, Tex., and consolidating volumes to its Cargray plant in Carson County, Tex. In that phase, the Stinnett plant underwent complete refurbishment.

Phase 2, which was delayed by depressed market conditions and reduced drilling in the area in 2009, involves relocation of the refurbished Stinnett plant (now called the Phoenix plant) to the East Panhandle's Arrington system in Hemphill County to replace the existing Arrington plant. Currently, Arrington is able to handle 40 MMcfd with lean-oil absorption.

The Phoenix plant will be able to handle 80 MMcfd of inlet gas from the growing Granite Wash play in the Texas Panhandle. The plant will initially be sized with sufficient compression to handle 50 MMcfd but may easily be expanded to its full 80 MMcfd with additional inlet, field, and residue compression, said the company announcement.

In addition, the Eagle Rock Energy plans to consolidate gas volumes at its cryogenic Canadian plant in Hemphill County into the new Phoenix plant, further improving the “overall gas recoveries to its customers” and enhancing the economics of the project.

The 25 MMcfd of capacity at the Canadian plant will remain available, said the company, allowing the ability to flow incremental volumes to that cryogenic processing plant if needed.

Relocating the Stinnett plant and consolidating the Canadian plant’s volumes will be completed in the third quarter at a cost of about $18.4 million. Eagle Rock said it does not anticipate downtime or reduced throughput volumes across its East or West Panhandle systems during completion of the project.

Increased drilling
Company Chairman and Chief Executive Officer Joseph A. Mills said the Granite Wash play is “experiencing significant drilling activity due to the strong production performance of recent horizontal wells, and the horizontal rig count has more than doubled since mid-2009.

“The play provides some of the highest rate of return drilling opportunities” in the US, he said. “We anticipate further rig count increases.”

He added that with “installation of the new Phoenix plant, Eagle Rock will be able to provide enhanced recoveries of condensate and NGLs…in the Granite Wash play of Hemphill, Roberts, and Wheeler Counties.”

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