Kinder Morgan Secures Enough Commitments for Eagle Ford KMCC Pipeline

Company Officials Say Kinder Morgan's Investments in Eagle Ford Crude and Condensate Total $1 Billion
Kinder Morgan's KMCC and Double Eagle System Map

Kinder Morgan’s KMCC and Double Eagle System Map | Click to Enlarge

Kinder Morgan Energy Partners (KMP) says it has secured long-term commitments for more than two-thirds of the 300,000 b/d capacity on its Kinder Morgan Crude and Condensate (KMCC) pipeline. The pipeline connects Eagle Ford crude and condensate to the Houston Ship Channel.



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Magellan Midstream Partners Will Spend $250 Million on Condensate Splitter

Eagle Ford Condensate Production Was 207,183 b/d in 2013
Magellan Corpus Christi Terminal

Magellan Corpus Christi Terminal | Click to Enlarge

Magellan Midstream Partners announced in late March plans to build a condensate splitter and make infrastructure improvements to its’ Corpus Christi terminal for $250 million. According to company officials, the splitter will be able to process 50,000 b/d of condensate, supported by a long-term commitment from commodities trader Trafigura AG.

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Exterran Acquires Eagle Ford Gas Compression Assets from Chesapeake in $360 Million Deal

Exterran Enters Seven Year Agreement with Access Midstream Partners
MidCon Compression Operations Map

MidCon Compression Operations Map | Click to Enlarge

Exterran Partners will spend $360 million to acquire natural gas compression assets from MidCon Compression, a subsidiary of Chesapeake Energy. These assets will be used by Exterran to provide contract services in the Eagle Ford and other domestic plays.

Included in the deal are 334 compression units, with a total horsepower of ~440,000.

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Portions of BHP’s Eagle Ford Gathering System Closed Due to Corrosion

$1.8 Billion in Eagle Ford Spending Planned from January to June

BHP Billiton LogoBHP Billiton reported in February 2014 that portions of its Eagle Ford gathering system have been temporarily closed due to corrosion. The cause of the corrosion issue is at present being evaluated by the company.

The gathering system closure was revealed in BHP’s December 2013 financial report of Petrohawk. BHP is required to report operations updates and financial results to Petrohawk’s debt holders, after acquiring the company in 2011.

Read more at 

BHP Eagle Ford Gathering Line Closure Operations Impact

According to BHP, production is continuing in the Eagle Ford, despite the interruption from the line closure. The company has increased the use of trucking to deliver product to market, and claims that there should be no significant impact on production.

BHP Eagle Ford Expenditures To Go Down in 2014

Onshore U.S. drilling and development cost BHP $2.4 billion in the second half of 2013. About 75% of this expense or $1.8 billion was spent in the Eagle Ford, mostly in the company’s liquids-rich Black Hawk acreage. The company achieved a 72% increase in production for onshore US liquids in the second half of 2013, which was primarily attributable to the Black Hawk acreage.

In 2014, expenditures are expected to decrease in the second half of the financial year, following a 35% decrease in the company’s active rig count to 26.

BHP Eagle Ford Highlights in Second Half of 2013

  • Eagle Ford gathering line system closed due to corrosion
  • BHP using trucks to deliver product to market
  • $1.8 billion Eagle Ford spending in second half of 2013
  • 72% increase in production for onshore US liquids
  • Active rig count down to 26 – 35% decrease

Phillips 66 Approves Funding for Two Midstream Projects in Southeast Texas – $3 Billion

Projects Will Create 50 Full-Time and 1,000 Temporary Construction Jobs
Sweeny, TX Refinery Phillips 66

Sweeny, TX Refinery Phillips 66 | Click to Enlarge

Funding for two Southeast Texas midstream projects was approved in early February 2014 by Phillips 66′s board of directors. Costs for the construction of a fractionator in Old Ocean, TX, announced in August of 2013, and a liquefied petroleum gas export terminal in Freeport, TX, are an estimated $3 billion combined.

According to Phillip’s 66, the projects will create more than 50 full-time jobs and over 1,000 temporary construction jobs.

Read morePhillips 66 Plans Gulf Coast Fractionator

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Valero Refinery Expansions Pushed Forward by Eagle Ford Production Growth – $730 Million

Valero Will Spend $730 Million on Two Expansions Along the Gulf Coast
Valero Refinery Map

Valero Refinery Map – Partial | Click to Enlarge

Valero plans to build crude topping units at its Corpus Christi, TX refinery and its refinery in Houston.

The two expansions come with a price tag of $730 million, but will likely be needed if the growth of light-sweet crude oil from areas like the Bakken, Eagle Ford, and Permian Basin continue.

Read more: Valero Houston Refinery Expanding for Eagle Ford Crude [Read more...]

Kinder Morgan & Magellan Expanding Eagle Ford System to Move Anadarko Crude & Condensate

Pumping Station, Storage, and 10 Miles of Pipe Will Be Added for $45 Million
Double Eagle Pipeline Eagle Ford System Map

Double Eagle Pipeline Eagle Ford System Map | Click to Enlarge

Double Eagle Pipeline, a partnership between Kinder Morgan and Magellan Midstream, is expanding to move more crude and condensate to the Houston Ship Channel.

Double Eagle Pipeline has signed an agreement with Anadarko Petroleum to extend its pipeline system and connect with the KMCC Pipeline to move crude to the Houston Ship Channel.

Also read: Kinder Morgan Expanding Its Eagle Ford Crude & Condensate Pipeline Into Karnes County [Read more...]

Plains All American Expanding Eagle Ford Fractionation & Condensate Stabilization

PAA Will Spend $120 Million and Bring the Facilities Online in Q2 2015
Plains All American Eagle Ford Assets

Plains All American Eagle Ford Assets | Click to Enlarge

Plains All American plans to spend $120 million to construct a new natural gas liquids (NGL) fractionator and expand its condensate stabilization facility in South Texas.

The new fractionator  will be located near the company’s Gardendale facilities in La Salle County, TX.

The fractionator is supported by third party commitments and will have capacity of 15,000 b/d of Y-Grade and off-spec Y-Grade products. [Read more...]

TexStar Is Building An Eagle Ford Pipeline From Karnes to San Antonio for Calumet

Pipeline Deliveries Will Offset Oil That Is Currently Trucked To Elmendorf, TX
Calumet Products San Antonio Refinery

Oil is currently delivered to the Calumet San Antonio Refinery by truck | Click to Enlarge

TexStar Midstream has signed an agreement with Calumet Specialty Products Partners to construct, own, and operate a 30,000 b/d pipeline system that will deliver Eagle Ford crude to Calumet’s San Antonio Refinery.

The deal includes a 15-year agreement for TexStar to build and operate the Karnes North Pipeline System (KNPS). The system will include 50-miles of 8-inch pipe from Karnes to the southeast side of San Antonio. [Read more...]

Rosetta Resources Plans to Spend $735 Million in the Eagle Ford in 2014

Production Growth of 20-30% Expected in 2014
Rosetta Resources Eagle Ford Acreage Map By Area

Rosetta Resources Eagle Ford Acreage Map By Area | Click to Enlarge

Rosetta Resources will spend approximately tw0-thirds of its $1.1 billion budget in 2014 in the Eagle Ford.

The company will spend $735 million running 4-5 rigs, with plans to drill and complete 90-95 gross wells. Approximately half of the activity will target the Eagle Ford from the company’s Gates Ranch leases.

Read more: Rosetta Acquires Additional Eagle Ford Interests at Gates Ranch

As a result of Eagle Ford and Permian Basin growth, Rosetta expects production to grow 20-30% to 60,000-65,000 boe/d. [Read more...]