Kinder Morgan Crude & Condensate Pipeline Expanding Into Gonzales County - $74 Million

Kinder Morgan Crude & Condensate Expansion into Karnes County

Kinder Morgan announced another expansion in the Eagle Ford. The company will spend $74 million to expand the Kinder Morgan Crude & Condensate (KMCC) pipeline 18 miles from the DeWitt Station into Gonzales County.

The latest expansion isn't included on the map, but it will extend north from the point near Cuero, TX.

The 24-inch pipeline will have capacity of 300,000 b/d. The expansion will connect with a new facility in Gonzales County that will have 300,000 bbls of storage, a pump station, and truck offloading facilities.

Kinder Morgan Expanding Eagle Ford System Into Karnes County

The oil will move through the Kinder Morgan system to delivery points in the Houston Ship Channel or the Phillips 66 Sweeney Refinery in Brazoria County, TX.

“We are pleased to enter this long-term arrangement to move more Eagle Ford Shale product to the Houston Ship Channel and surrounding areas and once again provide much needed optionality to Eagle Ford producers and Houston market consumers.”

— Don Lindley, president, Natural Gas Liquids Business Development for KMP.

The expansion is supported by commitment from a major Eagle Ford operator. My first thought is it is probably EOG Resources (comment below if you agree or not). There are other operators in the area, but none come to mind that could make a commitment large enough to support development of a 300,000 b/d pipeline.

Not counting what has already been invested, Kinder Morgan has a total of $900 million in planned investments in the Eagle Ford.

Read the full press release at KinderMorgan.com

Plains & Enterprise Announce Eagle Ford JV Pipeline Expansion

Plains All American Eagle Ford Assets

Plains All American and Enterprise Products are planning a $120 million expansion of the Eagle Ford JV Pipeline system. The expansion will increase the pipeline's capacity to 470,000 b/d of light and medium crude grades, as well as increase storage capacity in Corpus Christi, Gardendale, and Tilden by 2.3 million barrels.

The JV pipeline system is largely in service and will be completed by September 30, 2013. The companies will add capacity by looping pipelines and adding pumping capacity. The expansion will be complete by the second quarter of 2015. The JV pipeline was initially planned with potential for 350,000 b/d of capacity.

The expansion will be completed in time to support production moving through Plains' Cactus Pipeline. The Cactus Pipeline will have the capacity to move 200,000 b/d from West Texas into the Eagle Ford region.

Read the full press release at paalp.com or enterpriseproducts.com

Kinder Morgan Plans Second Condensate Facility at Galena Park

Kinder Morgan Galena Park Terminal Photo

Kinder Morgan has reached an expanded agreement with BP that will support the development of an additional 50,000 b/d condensate processing facility at Galena Park.

Kinder Morgan will invest an additional $170 million to add a second processing unit and add 700,000 barrels of storage at the site along the Houston Ship Channel. Total condensate processing capacity at the site will increase to 100,000 b/d.

“We are pleased to secure long-term contracts for all of the throughput capacity at our facility, and provide BP with the processing needed for Eagle Ford Shale production and other condensates,” said KMP Products Pipelines President Ron McClain. “Combined with our recently completed Kinder Morgan Crude Condensate (KMCC) pipeline, we are able to provide unparalleled connectivity to crude oil and clean products markets on the Texas Gulf Coast.”

“As production continues to grow, this might not be the last condensate processing facility we see announced. ”

Condensate processing facilities split the liquid into its various components - light and heavy naptha, kerosene, diesel, and gas oil. The individual components are more easily marketed.

As of the first quarter of 2013, the Eagle Ford is estimated to be producing more than 800,000 b/d of liquids, but only a little more than 400,000 b/d is considered oil. The remaining balance is attributable to condensates and NGLs. The amount of condensate production varies by well across the play, but as much as 50% of liquids production is potentially viewed as condensate by midstream companies.

Paul Reed, Chief Executive of BP’s integrated supply and trading business, said, “BP is proud to build upon our strategic partnership with Kinder Morgan through an increased footprint in Galena Park. We believe that by accessing this additional throughput capacity we will be better placed to provide U.S. producers a full suite of services including access to the best homes for their crude and condensates. It will also enable BP to service our customers better and more efficiently manage their feedstock and product needs. BP remains committed to helping unlock additional U.S. domestic energy production.”

This announcement comes in addition to the company's previous commitment to build a $200 million processing facility at Galena Park. BP committed to supply 40,000 b/d of condensate and agreed to a long-term lease of 750,000 barrels of storage at the facility in the summer of 2012. You can read more in the article BP - Kinder Morgan Ink Long-Term Eagle Ford Processing Agreement. The first phase is expected to be in service by the first quarter of 2014.

Read the latest press release at kindermorgan.com

BP - Kinder Morgan Sign Long-term Eagle Ford Processing Agreement

Kinder Morgan Galena Park Terminal Photo

Kinder Morgan announced on July 19, 2012, the company will provide long-term condensate processing services and storage at terminals located in the Houston Ship Channel. BP will lease 750,000 barrels of storage and has committed 40,000 barrels per day of condensate that will be split into its light and heavy napthas, as well as kerosene and gas oil.

To accommodate, Kinder Morgan will spend $75 million to add storage at its Galena Park Terminal. Five tanks that connect to the condensate facility, new pipes and pumps will will be part of the expansion.

While the agreement was described as long-term, the actual length of the contract was not released. You can read the full press release at KinderMorgan.com and can read more at our BP Eagle Ford Shale page.

Copano and Magellan Plan Eagle Ford Condensate Line to Corpus Christi

Copano Energy and Magellan Midstream are planning a midstream joint venture (Double Eagle Pipeline LLC) that will construct almost 150 miles of pipe to deliver condensate to Magellan's Corpus Christi marine terminal. Eagle Ford pipeline and midstream capacity will get a boost of 100,000 bbls/d when the system comes online. The system will also include a truck unloading facility near Three Rivers, TX. The two companies will also make improvements to existing facilities. Copano will convert a 50-mile natural gas pipeline to condensate and Magellan will add 500,000 bbls of storage at the Corpus Christi terminal.

Statoil and Talisman Energy who have joint development in the Eagle Ford are the primary shippers

"Magellan looks forward to joining forces with Copano for this project that provides significant strategic value for both parties and our customers," said Michael Mears, Magellan's president and chief executive officer. "Combined, we are able to provide an attractive option for shippers to deliver petrochemical quality Eagle Ford condensate for use in Corpus Christi or higher-valued Texas markets via Magellan's marine capabilities."

"This project represents the next logical step in Copano's strategy of offering a full set of midstream services to Eagle Ford Shale producers and we look forward to working with Magellan on this opportunity," said R. Bruce Northcutt, Copano's president and chief executive officer. "By combining Copano's pipeline assets with access to Magellan's terminal at Corpus Christi, the joint venture will be able to leverage existing infrastructure and provide producers timely access to market alternatives at very competitive rates. The joint venture will continue to look for ways to expand the project and capture other condensate and oil-related growth opportunities in the Eagle Ford Shale play."

Read the entire press release at copanoenergy.com