Rising production of natural gas will stimulate construction of gas processing plants in the US this year.
Companies are focusing on expanding and building gas processing plants, with new capacity totaling 920 MMcfd to come online this year, according to Oil & Gas Journal’s latest Worldwide Construction Update (OGJ Online, Subscriber Surveys, Nov. 17, 2008).
Unconventional gas
The boost in construction comes from increased gas production from shale gas plays such as Barnett in Texas, Haynesville in northwestern Louisiana and East Texas, and Marcellus in the Appalachian basin.
The Barnett shale has been the single biggest driver in US gas production growth, said Mark Papa, chairman and chief executive officer of EOG Resources at the Independent Petroleum Association of America’s annual meeting Nov. 11 (OGJ, Nov. 17, 2008, p. 32). According to Papa, Barnett shale production is about 4.4 bcfd today, compared with 1 bcfd 4 years ago.
The Haynesville and Marcellus shales also are expected to increase US production. Chesapeake Energy Corp. believes Haynesville will become the largest discovery of natural gas in the US and the fourth largest in the world. Chesapeake currently is using 17 operated rigs to further develop its 480,000 net acres of Haynesville shale leasehold and anticipates operating 35 rigs by yearend 2009.
Chesapeake is also the largest leasehold owner in the Marcellus play, which spans an area extending from West Virginia to southern New York, with 1.8 million prospective net acres. It plans to increase its Marcellus drilling in 2009.
Construction projects
The first phase of Anadarko Petroleum Corp.’s Chapita gas processing plant in the Uinta basin of eastern Utah was completed at the end of 2007. The facility added 250 MMcfd of processing capacity, nearly doubling what was previously available in the basin. The company currently is expanding Chapita to 500 MMcfd with a planned start-up in first-quarter 2009. The plant could be further expanded to 750 MMcfd.
Williams is building a 450-MMcfd processing plant in western Colorado’s Piceance basin, where the company has most of its gas production, reserves, and development activity. It will be in Rio Blanco County, Colo. Start-up is scheduled for third-quarter 2009.
In late 2007, MarkWest Energy Partners LP announced that it will invest $60 million to expand nearly all of its plants in the Appalachian region. The expansion includes replacing its existing Boldman and Cobb processing plants with cryogenic processing facilities. The work will increase the combined processing capacity at the two locations to 95 MMcfd from 75 MMcfd and will increase the production of natural gas liquids to over 180,000 gpd from 70,000 gpd. Completion is scheduled for early 2009.
In April, Enogex LLC, a subsidiary of OGE Energy Corp. announced it will provide gas gathering, processing, and transportation services for Chesapeake in the Colony Granite Wash play in Custer and Washita counties in the Anadarko basin of western Oklahoma. To accommodate the expected production growth in the Colony Granite Wash area, Enogex plans to invest more than $55 million in a combination of additional gathering and transportation pipelines and a gas processing plant near Clinton, Okla. The plant is expected to be in service in 2009 and will process up to 120 MMcfd of gas.
Quicksilver Gas Resources LP signed a contract with Exterran Energy Solutions to construct a third gas processing plant with capacity of 125 MMcfd to serve Barnett shale gas producers in the Fort Worth basin of North Texas. The plant is expected to come online during the first quarter of 2009.