Teak Midstream to expand Eagle Ford shale gas gathering, processing

Teak Midstream LLC is building more than 200 miles of natural gas gathering and residue delivery pipelines and an adjoining 200 MMcfd cryogenic gas processing plant in South Texas to transport and process Eagle Ford shale gas. Teak has executed 10-year firm gathering and processing agreements with Talisman Energy USA Inc. and Statoil Natural Gas LLC supporting the project.

The new facilities will consist of two separate high-pressure gas gathering systems. One system will use 125 miles of 24-in. OD pipeline to transport 600 MMcfd of gas; the other will use 20 miles of 20-in. OD pipeline to move about 400 MMcfd.

The 125-mile system will start on acreage jointly owned by Talisman and Statoil in La Salle County, Tex., and will move rich gas production to Teak’s Silver Oak processing plant in Bee County, Tex. Teak will own the first 50-mile segment of this system, the La Salle Lateral. The remaining 75-mile segment of the line, the Bee Express, will be jointly owned by Teak and TexStar Midstream and will travel through McMullen, Live Oak, and Bee counties to the Silver Oak plant.

The Teak-owned, 20-mile pipeline system, the Karnes Lateral, will also start on acreage jointly owned by Talisman and Statoil, moving rich gas production from Karnes County to the new processing plant.

Teak is building the Silver Oak gas processing plant near Pettus, Tex. The company describes the facility as using state-of-the-art technology and equipment designed specifically to handle liquids-rich Eagle Ford shale gas, helping maximize NGL recovery.

The project also includes construction of roughly 51 miles of 20-in. OD residue gas pipeline delivering dry gas from the Silver Oak plant. This pipeline will initially connect with four major downstream interstate pipelines—Tennessee Gas Pipeline, Texas Eastern, Transco, and NGPL—and cross several other interstate and intrastate pipelines.

Teak will also build 3 miles of 12-in. OD NGL pipeline to move liquids recovered at the processing plant to the DCP Sand Hills NGL pipeline for ultimate delivery to the Mont Belvieu fractionation complex and other fractionation facilities connected to the Sand Hills pipeline along the Gulf Coast.

Teak described the project as complementary to its 325-mile Texana gathering system in South and East Texas. The company is offering additional capacity in its gathering systems and processing plant to other suppliers throughout the Eagle Ford Shale play.

The cost of the project is about $280 million. Teak expects the facilities to enter service early in the third quarter.

Energy Transfer Partners LP last week announced its own pipeline and cryogenic processing expansions in the Eagle Ford shale (OGJ Online, Feb. 16, 2012).

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

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