This month, many new construction projects focus on relieving Midcontinent and Gulf Coast capacity constraints for liquids-rich production.
Recently, DCP Midstream LLC and West Texas LPG Pipeline LP unveiled agreements to provide long-term natural gas liquid (NGL) gathering services for DCP Midstream’s Sandhills Pipeline LLC via two new interconnect points with West Texas LPG.
The to-be-built 700-mile pipeline system is scheduled to transport y-grade NGLs from gas plants in the Permian Basin and South Texas to the various fractionation facilities along the Gulf Coast, and to the Mont Belvieu, Texas, NGL hub.
The Sandhills Pipeline will serve the NGL transportation needs of gas-processing plants and shippers in West Texas and South Texas, including the new 200 million cubic feet per day DCP Eagle gas plant designed to serve Eagle Ford shale gas development.
Elsewhere, Martin Midstream Partners LP moves to the front of the line, with plans to construct a new terminal at the Port of Corpus Christi, Texas, to receive crude oil volumes from the Eagle Ford shale via the recently announced Harvest Gardendale Pipeline. In conjunction with the new terminal construction, Martin Midstream also announced the execution of a long-term contract with a major integrated oil company for the initial capacity of the asset.
In addition, Martin Midstream plans to build more than 300,000 barrels (bbl). of crude oil storage at the new facility, with room to expand the capacity by an additional 600,000 bbl. if needed. This new terminal will be connected, via a 24-inch diameter pipeline, to both a barge dock and a deepwater marine tanker dock at the port.
A marine delivery system will be constructed with initial loading rates of up to 15,000 bbl. per hour. As crude production and storage volumes increase, Martin Midstream will expand the capacity of the delivery system to 30,000 bbl. per hour. The total project cost is estimated to cost some $25 million and is an anticipated to be in service by late 2011.
Meritage Midstream Services LLC also jumped into the NGL fray this month with an announcement that the company will build a new rich-gas gathering system, known as the Cuervo Creek Pipeline system, in Webb County, Texas. Escondido Resources II LLC will be the system’s anchor tenant and will have firm capacity on Meritage’s existing Eagle Ford Escondido Gathering System to move its Eagle Ford volumes.
Escondido Resources will dedicate some 33,000 acres to Meritage, including deep and shallow rights in the Eagle Ford, Escondido and Olmos formations. The Cuervo Creek Pipeline will traverse more than 1,300 square miles, from Encinal to Laredo, Texas.
Recommended Reading
Chesapeake Slashing Drilling Activity, Output Amid Low NatGas Prices
2024-02-20 - With natural gas markets still oversupplied and commodity prices low, gas producer Chesapeake Energy plans to start cutting rigs and frac crews in March.
Enbridge Advances Expansion of Permian’s Gray Oak Pipeline
2024-02-13 - In its fourth-quarter earnings call, Enbridge also said the Mainline pipeline system tolling agreement is awaiting regulatory approval from a Canadian regulatory agency.
Will the Ends Justify the Means for W&T Offshore?
2024-03-11 - After several acquisitions toward the end of 2023, W&T Offshore executives say the offshore E&P is poised for a bounce-back year in 2024.
Exxon Mobil, Chevron See Profits Fall in 1Q Earnings
2024-04-26 - Chevron and Exxon Mobil are feeling the pinch of weak energy prices, particularly natural gas, and fuels margins that have cooled in the last year.
PrairieSky Adds $6.4MM in Mannville Royalty Interests, Reduces Debt
2024-04-23 - PrairieSky Royalty said the acquisition was funded with excess earnings from the CA$83 million (US$60.75 million) generated from operations.