03.12.2009 14:00:00
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Enterprise Updates Eagle Ford Shale Pipeline Projects; Infrastructure Network to Access More Than 700,000 Acres
Enterprise Products Partners L.P. (NYSE:EPD) today provided an update on two pipeline projects currently under construction that are expected to provide in excess of 200 million cubic feet per day (MMcfd) of incremental transportation capacity for natural gas production from the Eagle Ford Shale formation in LaSalle and Webb counties in Texas in the first quarter of 2010. These pipeline projects are the initial expansions of Enterprise’s comprehensive network of midstream energy assets that spans South Texas and is well-situated to enable Eagle Ford Shale producers to maximize the value for their natural gas, natural gas liquid (NGL), condensate and crude oil production. By combining this new infrastructure with its existing assets, the partnership expects to have the capability to provide midstream services to more than 700,000 acres in the Eagle Ford Shale, 400,000 acres of which have already been dedicated to Enterprise. With the success and acceleration of drilling programs in the Eagle Ford Shale, Enterprise is evaluating additional investments to further expand its natural gas pipeline and processing facilities, as well as its NGL and crude oil pipelines in South Texas.
The White Kitchen Lateral, a new 62-mile, 16-inch diameter natural gas pipeline, runs through the heart of the developing Eagle Ford Shale play in LaSalle and Webb counties. The White Kitchen Lateral connects two existing 20-inch diameter pipelines that lie at opposite ends of the development that are part of Enterprise’s South Texas pipeline system. Certain segments of the White Kitchen Lateral are already in service and the remainder of the lateral is expected to be in service by the end of this month. An additional segment to further expand the capacity of the White Kitchen Lateral is scheduled for completion in the second quarter of 2010, at which time the White Kitchen Lateral is expected to provide in excess of 200 MMcfd of incremental natural gas pipeline capacity to the Enterprise system.
Enterprise is also proceeding with a 34-mile, 24-inch diameter natural gas pipeline which is the first segment of a major, east-west Eagle Ford Shale mainline. This segment is designed to connect the partnership’s South Texas pipeline system in southwest LaSalle County to the White Kitchen Lateral and should be in service in the second quarter of 2010.
"With exploration and production activity in the Eagle Ford ramping up quickly, it is essential that midstream infrastructure and services be able to keep pace,” said A.J. "Jim” Teague, executive vice president and chief commercial officer for Enterprise. "Enterprise recognized the potential of this play early and we have already responded by placing steel in the ground and are developing other projects that will complement our existing integrated network of South Texas assets and could start providing value-added services for producers within a matter of months.”
Natural gas production from this region of the Eagle Ford Shale has been rich with natural gas liquids (NGLs), ranging between four and nine gallons per thousand cubic feet of natural gas. These NGLs must be removed before the natural gas can meet the quality specifications to be transported in downstream natural gas pipelines and consumed by end-use markets. Enterprise has seven natural gas processing plants with an aggregate capacity of approximately 1.5 billion cubic feet per day that serve the partnership’s South Texas pipeline system by extracting NGLs and treating natural gas.
The forecasted growth in NGL production from the development of the Eagle Ford Shale is expected to place additional pressure on an already oversupplied NGL market in South Texas. Through Enterprise’s integrated midstream system, mixed NGL production from the Eagle Ford Shale can be fractionated in South Texas and distributed to local markets or transported to the partnership’s Mont Belvieu, Texas complex where the NGLs can be fractionated, stored and distributed to local or international markets through Enterprise’s export facility. The partnership can also transport mixed NGLs produced in South Texas to its South Louisiana facilities for fractionation, storage and distribution to local markets. Through Enterprise’s unique flexibility, Eagle Ford Shale producers should be able to realize the highest value for their NGL production, a significant component of their overall production.
With its recent acquisition of TEPPCO Partners, L.P., Enterprise is also providing transportation services for growing crude oil and condensate production from the Eagle Ford Shale. Today, these transportation services are being provided by truck. The partnership is also evaluating logistics opportunities that would enable Eagle Ford Shale crude oil and condensate production to be marketed at either the Cushing, Oklahoma oil trading hub or the Houston, Texas area market.
In August 2009, Enterprise announced that it had entered into a transportation and processing services agreement with a major Eagle Ford Shale producer that covers more than 150,000 acres and continues to pursue additional long-term relationships. The Eagle Ford Shale, which stretches from the Mexican border along the Gulf Coast almost to Louisiana, covers more than 10 million acres in Texas.
Enterprise Products Partners L.P. is the largest publicly traded partnership and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. The partnership’s assets include: more than 48,000 miles of onshore and offshore pipelines; approximately 200 million barrels of storage capacity for NGLs, refined products and crude oil; and 27 billion cubic feet of natural gas storage capacity. Services include: natural gas transportation, gathering, processing and storage; NGL fractionation (or separation), transportation, storage, and import and export terminaling; crude oil and refined products storage, transportation and terminaling; offshore production platform; petrochemical transportation and storage; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems and in the Gulf of Mexico. For additional information visit www.epplp.com. Enterprise Products Partners L.P. is managed by its general partner, Enterprise Products GP LLC, which is wholly owned by Enterprise GP Holdings L.P. (NYSE:EPE). For more information on Enterprise GP Holdings L.P., visit www.enterprisegp.com.
This news release includes forward-looking statements. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties. These risks and uncertainties include, among other things, weather-related events, insufficient cash from operations, market conditions, governmental regulations and factors discussed in Enterprise Products Partners L.P.'s filings with the Securities and Exchange Commission. If any of these risks or uncertainties materializes, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those expected. The partnership disclaims any intention or obligation to update publicly or reverse such statements, whether as a result of new information, future events or otherwise.
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