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Copano to build Eagle Ford NGL pipeline; supply Formosa

Christopher E. Smith
OGJ Pipeline Editor

HOUSTON, Jan. 25 -- Copano Energy LLC entered into a long-term fractionation and product sales agreement with Formosa Hydrocarbons Co. Inc. and, to facilitate deliveries of mixed NGLs to Formosa, also formed a 50-50 joint venture with a subsidiary of Energy Transfer Partners to construct, own, and operate a 12-in. OD NGL pipeline (Liberty Pipeline). Liberty Pipeline will extend about 83 miles, from Copano's Houston central gas processing complex in Colorado County, Tex., first to Formosa's leased NGL product storage facility in Matagorda County, Tex., and then to Formosa's petrochemical facility in Calhoun County, Tex.

The agreement provides Copano with up to 37,500 b/d firm fractionation services beginning first-quarter 2013 for a term of 15 years. The agreement also provides that Formosa will purchase the resulting NGL products and make product storage available to Copano for operational reliability. Following completion of Liberty Pipeline, expected by summer 2011, and until additional facility improvements at Formosa are complete, Copano will have access to a minimum of 5,000 b/d of existing Formosa fractionation capacity, as well as additional capacity on a "space available" basis.

Liberty Pipeline will have initial capacity of 75,000 b/d, committed to Copano and Energy Transfer (50% each) under firm throughput agreements. Copano and Energy Transfer will together invest about $52 million for the pipeline and related facilities.

Copano said the agreements would increase its total Eagle Ford NGL handling capacity to more than 80,000 b/d.

Eagle Ford Gathering LLC (EFG), a joint venture of Kinder Morgan Energy Partners LP and Copano, earlier announced plans to construct 85 miles of 24-in. and 30-in. OD pipeline to move natural gas produced in the Eagle Ford shale by SM Energy Co. from La Salle, Dimmit, and Webb counties in Texas to the Freer compressor station in Duval County, Tex., for transport on KMEP’s Laredo-to-Katy (LK) pipeline. The LK line will in turn transport gas to Copano's Houston Central complex (OGJ Online, July 8, 2010).

Chesapeake Energy Corp. reached 10-year agreements in December 2010 with Enterprise Products Partners LP providing Chesapeake with gas transportation, processing, and NGL processing and fractionation services for its Eagle Ford production.

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


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