Enterprise Products Third Yoakum Processing Plant Online, Volumes Up

Enterprise Eagle Ford Project Map
Enterprise Eagle Ford Project Map

Enterprise Product Partners brought its third cryogenic processing plant in Yoakum, TX, online in March and is reaping the benefits. Natural gas processing volumes are up 38% and NGL production is up 532% from one year ago in South Texas.

The Yoakum Facility in Lavaca County will have ultimate capacity of 900 mmcfd. The first plant at the Yoakum Facility came online in May of 2012, the second in August of 2012, and the Third in March of 2013. From just a year ago, fee-based processing volumes in the region have increased by 622 mmcfd and equity NGL production has increased by 27,000 b/d.

It's good timing. Volumes in the Rocky Mountains have fallen considerably, but South Texas growth has more than offset the declines.

Enterprise is also on pace to complete construction of its latest segment of its Eagle Ford crude oil pipeline in the third quarter. The project is a joint venture with Plains All American Pipeline. You can read more about the joint venture in the article Plains All American - Enterprise Eagle Ford Crude Oil Joint Venture. 

Those aren't the only assets benefiting from Eagle Ford growth:

The Texas Intrastate pipeline system reported an $8 million increase in gross operating margin on a 389 billion British thermal units per day (“BBtud”) increase in natural gas pipeline volumes compared to the first quarter of 2012 as a result of increases in Eagle Ford shale production.

Read the full press release at enterpriseproducts.com

Kinder Morgan CEO Discusses Growing Oil & Gas Production

Kinder Morgan CEO, Rich Kinder, discusses growth potential at his companies. The company is now looking at new pipelines and Kinder was one of the first to expand its crude by rail capability. Kinder Morgan now has five crude to rail facilities and one of the larger terminals on the Houston Ship Channel (Galena Park).

Kinder says "I've never sold a share" because of the growth opportunity. Kinder Morgan has over $12 billion in expansion projects and has an open season for an oil pipeline to California. Kinder will convert a natural gas pipeline to oil and move oil from the Permian Basin to California. It's a $2 billion project that could initially move 250,000 b/d and could be expanded. The project reads well for the Eagle Ford as it will alleviate supply pressure in the Gulf Coast markets as well.

 

Atlas - Teak Eagle Ford Midstream Deal Worth $1 Billion

Teak Midstream Eagle Ford Map
Teak Midstream Eagle Ford Map

Atlas Pipeline Partners has agreed to buy Eagle Ford Midstream assets through a $1 billion acquisition ofTeak Midstream, LLC. Atlas will gain Teak's operated assets and assets that are jointly owned with TexStar Midstream.

Assets acquired in the deal included:

  • 200 MMcfd of cryogenic processing plant (Silver Oak)
  • 200 MMcfd cryogenic processing facility under construction (Silver Oak II)
  • 265 miles of 20" to 24" gathering and residue pipelines with 750 mmcfd of capacity
  • 275 miles of low pressure gathering lines

Atlas will also acquire a 50-75% interest in several assets jointly owned with TexStar Midstream. Atlas is expected to operated the assets once the deal closes:

  • 235 miles of pipeline, including rich gas gathering, header, and residue pipelines
  • 3 miles of NGL pipeline
  • A Co-Gen facility, which will produce power for the Silver Oak complex
We are very excited about the acquisition of TEAK Midstream. We have been looking at the Eagle Ford shale for a number of years and are fortunate to have found what we believe is the ideal entry point. TEAK’s assets are the highest quality and best positioned for growth with minimal capital requirements. The assets are new, highly efficient, and are located in the heart of one of the most prolific plays in North America.
— Eugene Dubay, Atlas CEO

 

Atlas expects to further expand the assets going forward. Expansion projects include the potential for additional gathering lines and a third 200 mmcfd processing plant.

 

Plains All American Planning Cactus Pipeline - McCamey to Gardendale

Plains All American Eagle Ford Assets
Plains All American Eagle Ford Assets

Plains All American Pipeline announced a new $350 million pipeline that will move 200,000 b/d of crude oil from the Permian Basin into the Eagle Ford region. The Cactus Pipeline will be a 310-mile, 20-inch crude oil pipeline from McCamey, TX, to the Gardendale Area in La Salle County, TX.The pipeline is supported by a long-term capacity commitment and is expected to be in service in the first quarter of 2015. Plains estimates total costs will come in around $350 to $375 million.

From La Salle County, crude will have access to the Gardendale rail or Plains and Enterprise's Eagle Ford Joint Venture system. The Eagle Ford JV Pipeline provides direct access to Corpus Christi and Three Rivers, as well as access to Houston through Entrprise's South Texas Crude Oil Pipeline. In Corpus Christi, oil has access to marine terminals.

In an oil price environment with large basis differentials, options can create a lot of value. Permian crude will now have access to barges, railroads, and pipelines in South Texas.

Read the full press release at paalp.com

Kinder Morgan Plans Second Condensate Facility at Galena Park

Kinder Morgan Galena Park Terminal Photo
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