May 5, 2011 [Opis] - Enterprise Products Partners L.P. said on Tuesday that it plans to build an 80-mile extension of its 350,000 b/d Eagle Ford Shale crude oil pipeline that would allow the partnership to serve growing production areas in the southwestern portion of the play. The Phase II project would originate in Wilson County, Texas at the terminus of the partnership's previously announced 140-mile Phase I segment, and extend to a site near Gardendale, Texas in La Salle County, where a new central delivery point (CDP) is planned for construction that will feature 500,000 bbl of storage.
Phase I is on schedule to begin service by the second quarter of 2012, with Phase II set to commence operations in the first quarter of 2013. When completed, the approximately 220-mile crude oil pipeline system will provide Eagle Ford Shale producers with access to the Texas Gulf Coast refining complex through Enterprise’s integrated midstream network. The Phase II extension, which is being designed with a capacity of 200,000 b/d, is anchored by a 10-year agreement with Chesapeake Energy Marketing, Inc., a subsidiary of Chesapeake Energy Corporation. As part of the long-term contract, Chesapeake has committed to 100,000 b/d of firm crude oil transportation capacity.
“Including the Chesapeake agreement, we now have producer commitments for nearly all of the available capacity on Enterprise’s Eagle Ford crude oil pipeline, with 320,000 b/d under 10-year contracts,” said Jim Teague, executive vice president and chief operating officer of Enterprise’s general partner. With more than 2.5 million acres under lease and potentially 15,000 wells to be drilled over the production life of the Phase II service area-based on the partnership’s own research and information from producers-development activity in this region of the Eagle Ford Shale is expected to remain brisk for the foreseeable future. Estimates provided by producers also suggest that up to 3 billion bbl of crude oil are recoverable in the southwestern region of the play. The Phase II project would address the lack of pipeline infrastructure in the southwestern crude oil production region of the Eagle Ford Shale and provide shippers with access to Enterprise’s Sealy, Texas delivery point.
The Sealy facility interconnects with the partnership’s Rancho Pipeline and feeds into Enterprise’s new ECHO crude oil storage terminal being constructed at a location along the Houston Ship Channel in southeast Harris County, Texas. The pipeline options available to shippers via the terminal would provide access to more than 2 million b/d of refining capacity in the Houston area. Approximately 165 rigs are presently working in the Eagle Ford Shale, which have drilled more than 1,200 wells. Current production from the play is approximately 100,000 b/d of crude oil and condensate.
