Louisiana chalk NGL pipeline venture eyed

Combined NGL Pipeline [21736 bytes]

Two companies have combined natural gas liquids pipelines in East Texas and western Louisiana to support development in the eastern Austin chalk trend.

ARCO Pipe Line Co. (APL), Houston, contributed Black Lake pipeline to the $32 million joint venture, and Union Pacific Resources Group Inc. (UPR), Dallas, its Rosepine lateral pipeline.

Units of each company hold 50% interest in the JV, formed effective Aug. 7. APL is operator of the combined system.

Disclosure of the new JV marks the second disclosure this month of downstream plans tied to expanding exploration and development of Cretaceous Austin chalk formations in Louisiana. Oxy U.S.A. earlier said it agreed to dedicate gas from its Masters Creek wells to a processing plant planned by units of El Paso Energy Corp. and Tenneco Energy (OGJ, Aug. 12, p. 33).

Information is tight about gathering and processing plans in the area, as companies vie for rights to increasing gas flows from Louisiana Austin chalk wells.

Already a leading producer in the Texas portion of the trend, UPR in the past 18 months has spent about $110 million on exploration and production in the East Texas and western Louisiana chalk. UPR in support of its Louisiana chalk E&P is constructing a 100 MMcfd gas processing plant at Masters Creek in Vernon Parish, La.

How JV components fit

Karen K. Caldwell, APL vice-president, said NGL volumes associated with new drilling in the area could double current volumes on Black Lake pipeline.

"The partnership with UPR gives us the opportunity to more fully participate in the growth of this highly prospective area," Caldwell said.

Don Niemlec, president of Union Pacific Fuels and vice-president of marketing for UPR, said the JV enables UPR to aggressively pursue marketing opportunities in one of its core areas.

"Our partnership with APL provides enhanced resources to expand our gas value chain investments in an area we believe will have significant growth," Niemlec said.

The 255 mile Black Lake pipeline transports NGL from the Cotton Valley area in Webster Parish, La., to fractionation facilities at Mont Belvieu, Tex. In addition to other gas processing plants along its route, the line also serves UPR's Brookeland gas processing plant in Jasper County, Tex.

Beginning in second quarter 1997, the Black Lake line also is to transport NGL from UPR's Masters Creek processing plant.

APL is upgrading Black Lake to handle as much as 50,000 b/d of NGL.

UPR, meantime, is constructing the 25,000 b/d Rosepine NGLs to connect the Master Creek plant with Black Lake pipeline.

A 52 mile spur, Rosepine is to be completed in December 1996.