Sand Hills NGL Pipeline In Service & Moving Permian & Eagle Ford Liquids

DCP Sand Hills Pipeline Map - Eagle Ford Segment

The Sand Hills NGL Pipeline is online and taking NGLs from the Permian & Eagle Ford regions to fractionation facilities in the Gulf Coast and near Mont Belvieu.

The pipeline is 720 miles and runs from West Texas, near Midland, into South Texas on to Mont Belvieu. The pipeline will have initial capacity of 200,000 b/d and could be expanded to 350,000 b/d if needed.

“Sand Hills and Southern Hills provide a solution to the critical need for vital transportation capacity from key liquids producing regions,” said Wouter van Kempen, CEO.

DCP has a total of 1.3 bcf/d of processing capacity in the Permian and will have 1.2 bcf/d of capacity in the Eagle Ford once the Goliad Plant is completed in early 2014.

The Sand Hills in service was announced in conjunction with the in service of the Southern Hills NGL pipeline that moves liquids from the Midcontinent region to the Gulf Coast.

Read the full press release at dcpmidstream.com

Valero's Quebec Refinery Processing Eagle Ford Barrels "Very Well"

Valero Refinery Map

It's no secret that Canada is importing more and more U.S. oil. Some of that is coming from the Eagle Ford.

In the first quarter of 2013, the U.S. sent almost 100,000 b/d to refineries in Canada. The reality is the U.S. is much close and can supply oil at more competitive rates than places like western Africa.

San Antonio based Valero has a 235,000 b/d refinery in Quebec and as of May had sent one shipment to test how well the refinery can process Eagle Ford barrels. Results were positive, so its likely more crude will be heading north.

“The test proved the refinery could process Eagle Ford barrels.”

— Day

It's really pretty amazing what has happened. Gulf Coast refineries have been preparing to take heavy crude, like those produced in Canada, and Canadian refineries are better suited for light crudes, like those produced in Texas.

Valero plans to start shipping Eagle Ford crude to its Quebec refinery on a more consistent basis in the second half of 2013.

Read more at mysa.com

Rosetta's Growth & Quarterly Beat Driven By The Eagle Ford

Rosetta Resources Eagle Ford Midstream Map

Rosetta Resources' performance in the first quarter beat consensus estimates from analyst due to better price realizations and hedges in the Eagle Ford.

It didn't hurt that Eagle Ford production grew 54% over the previous year or that oil production from the play had grown 70%. Company-wide production grew 6% over the fourth quarter and set a record at 47,000 boe/d.

“Rosetta’s first quarter results reflect a strong start in 2013 with record levels of production. We will continue to focus on efficient operational execution as we further expand the development of our Eagle Ford program.”

— Jim Craddock, Rosetta's CEO.

Rosetta also began adding stabilizers to the company's condensate gathering facilities. The company is heating the condensate to vaporize the lighter ends of the barrel. This allows the condensate to meet pipeline specifications. As a result the company's condensate production shrinks a bit and NGL production grows.

In the first quarter, Rosetta spent $161 million to drill 24 gross wells and complete 17 wells. The company operated 5-6 rigs in the Eagle Ford area during the quarter. At the end of the quarter, 38 wells that had been drilled were awaiting completion.

Four well pads have become the choice for development, but the company is testing five and six well pads. Well costs should fall even further with more wells from a single pad.

Natural Gas Header Complete - Eagle Ford Gas Ready To Flow

Tres Palacios Pipeline Header and Storage

Inergy, LP has completed a 20-mile, 24-inch pipeline header extension that will allow natural gas to flow from Kinder Morgan's Houston Central gas processing plant in Colorado County to the Tres Palacios storage hub in Matagorda County.

The Tres Palacios Header crosses ten interstate & intrastate pipelines and connects the Tres Palacios storage hub to the Houston Central processing plant.

• Tres Palacios gas storage facility is located in Matagorda County, TX, and includes 38.4 bcf/d of working gas storage capacity
• Houston Central plant has capacity to process 700 mmcfd of gas and fractionation capacity of 22,000 b/d. The plant is being expanded to process an additional 400-800 mmcfd of rich gas from the Eagle Ford. The facility was formerly known as the Copano Houston Central Plant

“Beyond providing Eagle Ford Shale producers with significant new market options, we believe our new Houston Central interconnection will increase liquidity at the Tres Palacios hub point for marketers to access supply.”

— Bruce Page, VP

This is one of several midstream developments that will enhance the value of natural gas and NGLs being produced in the Eagle Ford.

Double Eagle Pipeline Moving Eagle Ford Condensate to Corpus Christi

Double Eagle Pipeline - Eagle Ford Condensate System

Double Eagle Pipeline, LLC, a joint venture between Kinder Morgan and Magellan Midstream, has started moving condensate to Corpus Christi.

The pipeline is part of a project that was started by Copano and Magellan, but is operated by Kinder Morgan who purchased Copano earlier in 2013.

Condensate is moving from a truck unloading facility in Three Rivers to Magellan's Corpus Christi Terminal. From the Corpus Terminal, condensate can reach local petrochemical plants, as well as water borne export options.

This leg is just a portion of what is a $150 million project that includes 140 miles of 12-inch pipelines. The system connects with other Kinder Morgan pipelines in the area as well.

The next leg of the pipeline from Gardendale (near Cotulla) to Three Rivers is expected to be online in the third quarter of 2013. Initial capacity is planned at 100,000 b/d, but the system can be expanded to handle 150,000 b/d.

The pipeline was supported by long-term commitments from Talisman and Statoil.