Christopher E. Smith
OGJ Pipeline Editor
HOUSTON, May 24 -- Enterprise Products Partners LP reported an expansion of its network of oil and natural gas assets in South Texas as part of a letter of intent with a major Eagle Ford shale producer. According to the LOI, Enterprise will build a 140-mile oil line originating in Karnes County, Tex., that will connect to the partnership's existing oil system in Austin County, Tex., supported by a long-term transportation agreement.
Enterprise is in discussions with other producers to provide oil transportation services through additional connections to the pipeline. When completed, Enterprise's system will provide access to the refining markets in the Houston area, as well as the major storage hub in Cushing, Okla., through the Enterprise-operated Seaway pipeline.
The capacity of the new oil line will be sufficient to serve multiple producers as output in the Eagle Ford shale region continues to increase, according to Enterprise. Enterprise is building three central delivery points along the line to receive oil from gathering lines and trucks. Two of the delivery points will be in Karnes County, Tex., with the third in Gonzales County, Tex. Enterprise expects the crude expansion to be complete in fourth-quarter 2011.
The LOI also contains a 7-year gas transportation and processing agreement. Enterprise recently announced initiatives to increase NGL fractionation capacity at its Mont Belvieu, Shoup, and Armstrong facilities (OGJ Online, May 13, 2010). Expansion plans under the LOI include additional gas processing and NGL pipeline infrastructure.
Activity in the Eagle Ford shale continues to exceed industry expectations, according to Enterprise, with roughly 50 rigs having drilled more than 130 wells. Current production is estimated at 190 MMcfd of gas and 10,000 b/d of oil.
Contact Christopher E. Smith at [email protected].