Infrastructure of Cotton Valley expanding with exploration and development action

Delhi's Expansion Project [39619 bytes]

As exploration and development activity builds in the Cotton Valley reef play of East Texas, companies are advancing additional gathering systems, treatment complexes, and trunk pipelines.

Delhi Gas Pipeline Corp., a unit of Delhi Group, Dallas, owned by USX/Marathon Group, has gathered and processed all of the reef production. Delhi is nearing completion of a second-phase system expansion, including treatment plant upgrading (OGJ, Mar. 3, 1997, p. 23).

Western Gas Resources Inc., Denver, entered the action in 1996, and Valero Energy Corp. unit Valero Natural Gas Co. is pressing a pipeline capacity expansion in its big trunkline that extends from Bethel, Anderson County, to the Carthage hub in Panola County.

Other pipeline infrastructure companies active in the play include Tejas Gas Corp. and units, and Rockland Pipeline Co., affiliated with American Cometra Inc., Fort Worth.

Geophysical companies active include Eagle Geophysical, Houston, a Seitel Inc. unit; Western Geophysical; and Veritas.

Delhi's expansion

As part of its second-phase pinnacle reef expansion project, Delhi is laying additional 20-in. pipeline and adding more compression as part of a $44 million East Texas system expansion.

The project will provide infrastructure not only for pinnacle reef production but also for Cotton Valley Smackover trend production along its system, Delhi said.

Work follows a September 1995 agreement with Marathon for gas gathering, treatment, and transportation during a 10-year period. When all expansion work is completed, Delhi will be connected from the Riley Trust producing area on the south end of the current play area to its Aker complex in northern Freestone County via 20-in. pipeline.

The current expansion will bring Delhi's total pinnacle reef capacity to about 300 MMcfd of gathering and treating, leaving Delhi with about 100 MMcfd of excess capacity to handle future production. Additional expansions will be undertaken as the play develops.

Phase two work has included construction of 92 miles of 20-in. line, an additional 8,000 hp of compression, and inlet capacity increases at the Aker treatment complex, east of Streetman, Tex. Delhi also built an amine plant at the Aker complex.

Phase one construction involved 48 miles of 20-in. and 8-in. pipeline, installation of 4,000 hp of compression, and an increased inlet capacity at its Teague plant.

As part of its first phase expansion, Delhi constructed 25 miles of 12-in. pipeline to connect existing and future Marathon wells directly to the Teague complex. Sulfur-handling capacity was increased to 18 long tons/day from 14 long tons/day.

Infrastructure slated

Western Gas Resources is advancing work valued at about $60 million in a first phase pipeline, gathering, and treatment project expansion.

Work stems from a long-term gas gathering and treatment agreement with the Broughton Associates joint venture, signed last November, and other long-term agreements concluded earlier with Sonat Exploration, UMC, Aspect Resources, and M.B. Exploration. The agreements encompass a leased-acreage dedication totaling more than 500,000 gross acres.

Western unit Pinnacle Gas Treating Inc. is constructing a gathering and sour-gas treatment complex near Bethel, Tex., to handle as much as 350 MMcfd. Western said producers had reserved 225 MMcfd of firm capacity under fee-based contracts for services.

The complex can be expanded to handle as much as 1 bcfd to accommodate new discoveries and additional producer dedications.

In the pipelay portion of the project, involving a total of 75 miles of gathering pipeline and main line, Western will extend its original 45-mile, 20-in. trunk line about 30 miles further south, and it will increase the size of another 30-mile segment to 24-in. from 20-in. Western also plans to lay additional gathering pipeline and expand trunk lines to the north and east as dedicated acreage is developed. Start-up is slated this June.

Western said the Bethel treatment complex will have a residue gas connection with a major intrastate pipeline, and other connections are anticipated.

Valero's plans

Valero's $11.7 million capacity expansion, to take place in three phases in 18-24 months, will add about 465 MMcfd of capacity to support the pinnacle reef play. With exception of measurement, it said virtually all of the expansion of its 30-in. pipeline will be done by installing additional compression.

Valero's East Texas pipeline was completed in 1991 as an extension to its North Texas pipeline, originating at the Waha hub in Pecos County.

The East Texas capacity expansion is part of a "west-east strategy," which Valero began implementing when it placed the 105-mile extension of its East Texas pipeline in service.

Last October, it disclosed it had signed long-term agreements with Sonat and Delhi, and was discussing similar agreements with other interested parties.