Enterprise to build 350,000 b/d Eagle Ford oil pipeline

Christopher E. Smith
OGJ Pipeline Editor

HOUSTON, Sept. 1 -- Enterprise Products Partners LP reported its operating subsidiaries entered into long-term agreements with EOG Resources Inc. to provide comprehensive midstream energy services for EOG's growing crude oil and associated liquids-rich natural gas production in South Texas’ Eagle Ford shale.

Enterprise will build a 140-mile, 350,000-b/d pipeline originating in northwestern Karnes County, Tex., to transport EOG's oil production from the Eagle Ford shale. The pipeline will extend to Enterprise’s existing system in Austin County where it will connect to the partnership's Sealy station.

The pipeline, anchored by a 10-year, firm transportation agreement with EOG, allows access to both Houston refineries and the Enterprise-operated Seaway Pipeline system linked directly to Cushing, Okla. Enterprise says the pipeline will not only meet EOG's requirements, but have capacity to accommodate other Eagle Ford producers currently in discussions with Enterprise.

Enterprise plans to build central delivery points for receiving oil from trucks and gathering pipelines at multiple locations along the pipeline route and expects the line to enter service in first-quarter 2012. In the interim, Enterprise is providing oil transportation services via truck until the pipeline is in service.

Enterprise also will provide firm gas transportation and processing, as well as NGL transportation and fractionation services to EOG, anchored by 7-year contracts and has committed to the construction of 52 miles of additional pipeline laterals to complement its previously announced Eagle Ford rich gas mainline project (OGJ Online, July 12, 2010).

In addition to rich and lean gas transportation capabilities, Enterprise will provide EOG with gas processing services at the partnership's planned 600 MMcfd cryogenic gas processing facility, to enter service mid-2012. The NGLs recovered from EOG's gas volumes at the new plant will move through Enterprise's recently announced 127-mile, 12-in. OD NGL pipeline to its Mont Belvieu complex, where the company will build a fifth NGL fractionator.

Before completing these new gas processing and NGL facilities, Enterprise will use existing capacity in its South Texas infrastructure to process EOG's natural gas and transport and fractionate NGLs recovered from EOG's gas production.

Activity in the Eagle Ford Shale continues to exceed industry expectations, according to Enterprise, as more than 90 rigs working in the play have drilled more than 175 wells. Enterprise estimates current production from the play at about 300 MMcfd gas and 40,000 b/d of oil and condensate.

Contact Christopher E. Smith at chriss@ogjonline.com.

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