PEMEX Shale Play Spending to Grow to $200 Million

Mexico Eagle Ford Shale Map

PEMEX is preparing to spend $200 million researching and testing shale plays in Mexico. The national oil company plans to test two shale plays, with a focus in the Eagle Ford and one other play.

Commissioner Guillermo Dominguez said seismic studies to be carried out are designed to determine whether the rich petroleum deposits found in shale rock formations in the U.S. extend into Mexico. He said one of the two "large blocks" to be studied is an extension of the Eagle Ford shale rock formation that runs from Texas into Mexico. The other site is just down the Gulf of Mexico near Tampico.

Even if PEMEX is successful, don't expect a drilling boom any time soon. Company representatives expect they are 5-8 years away from true shale gas development. To be honest, there's no need to push it. The country is positioned well to import U.S. natural gas, which is very cheap in in the worldwide market. Read more about the company's plans in our article Eagle Ford Gas is Headed to Mexico.

You can read an article with additional quotes at rigzone.com

Enterprise Products Cryogenic Processing Expands by 300 mmcfd in Yoakum

Yoakum TX Map

Enterprise Products' second 300 mmcfd cryogenic processing train in Yoakum, in Lavaca County, has come online. Capacity is now 600 mmcfd at the plant and the company has the ability to extract 74,000 b/d of NGLs. The first Enterprise Yoakum processing train came online in May of 2012.

The latest announcement includes the second train and brings capacity to two-thirds of what is ultimately planned. When completed the facility will have total capacity of 900 mmcfd.

“Like the Eagle Ford Shale play itself, our Yoakum natural gas facility continues to exceed expectations and provide Enterprise with new growth opportunities,” said A.J. “Jim” Teague, executive vice president and chief operating officer of Enterprise’s general partner. “Based on the operating results we’ve seen from the first train which began service in May 2012, we expect the second and third trains to perform above their original design capacity, giving us the confidence to pursue additional processing commitments for all three plants.”

Read the full press release at enterpriseproducts.com

Kinder Morgan & Phillips 66 Eagle Ford Crude Delivery Deal to Supply Sweeny Refinery

Sweeny TX Refinery Phillips 66

Kinder Morgan (KMP) and Phillips 66 have reached an Eagle Ford crude delivery deal. KMP will build a 12-inch, 27 mile lateral from its Eagle Ford Crude Condensate pipeline to Phillips 66's Sweeney Refinery in Brazoria County.

Phillips is committing to take a "significant portion" of the pipeline's initial 30,000 b/d of capacity. The pipeline will have the potential to be expanded to 100,000 b/d if needed.

KMP will invest approximately $90 million in the project, which also involves adding associated receipt facilities by constructing a five-bay truck offloading facility and three new storage tanks with approximately 360,000 barrels of crude/condensate capacity at Kinder Morgan’s DeWitt Station in DeWitt County, Texas, and Wharton Pump Station in Wharton County, Texas. Pending receipt of environmental and regulatory approvals, construction is scheduled to begin in the fourth quarter of 2012.

Kinder Morgan's Eagle Ford Crude Condensate pipeline was brought online in June of 2012.

Read the full press release at kindermorgan.com

Flint Hills Resources Plans $250 Million Refinery Expansion

Flint Hills Resources' West Refinery in Corpus Christi is getting $250 million in upgrades. The improvements will allow the company to process more Eagle Ford crude and reduce emissions. The upgrades wouldn't add capacity, but would allow the company to process more South Texas crude. Flint Hills operates two Corpus Christi refineries. The West Refinery that will be upgraded refines 230,000 barrels of oil per day and the East Refinery refines 70,000 barrels per day. Currently, only 50% of the crude processed in the West Refinery is sourced from the Eagle Ford, but additional processing facilities will allow Flint Hills to maximize the use of local supply. The expansion will not be noticeable to the untrained eye and will add 1,000 jobs at the peak of construction.

“If we receive the final go-ahead and appropriate permits the site will see construction activity for about two years, with as many as 1,000 additional workers on site on many days,” Gaarder added. “However, this project will not require more land nor will new equipment be easily noticed from I-37.” Flint Hills also is establishing a project-specific, near-neighbor panel.

Flint does have to file for permits from both the TCEQ and the EPA before construction can start. Read the full news release at fhr.com

Eagle Ford Natural Gas is Headed for Mexico - Major Pipeline Expansions Planned

Gas Pipeline Arid

Eagle Ford natural gas pipeline expansions are headed for Mexico. An $8 billion expansion of Mexican natural gas infrastructure is being pushed forward. The early focus is on industrial cities in the northern half of the country where a $3 billion expansion is planned.

"Mexico has a unique opportunity, we have access to the world's cheapest gas," Mexican Energy Minister Jordy Herrera said of the U.S. supply in announcing the new pipeline plans earlier this year. "This is competitiveness for the industry of our country."

U.S. companies are lining up to help supply and construct the proposed Mexican infrastructure. Expect to see companies like Kinder Morgan reverse the direction of some of its current natural gas flows and expand pipelines into Mexico. The Eagle Ford currently produces almost 3 bcf/d, but that number could almost triple over the next five years. That's a lot of natural gas to be absorbed in South Texas. Actually, its much more than the region can absorb. If 5+ bcf/d of additional supply comes online, the natural gas will need a market. That market will either come from Mexico or from across the globe shipped as LNG. Both pipelines and liquefaction facilities come with big price tags, but don't expect PEMEX (Mexico's national oil company) to wait around. The country needs natural gas and the Eagle Ford is positioned well to answer.

Read the full story detailing Mexico's plans at chron.com