OKLAHOMA CITY—With the Cushing terminal in place, the Midcontinent doesn’t have many oil and gas infrastructure shortcomings. But that doesn’t mean there aren’t some serious challenges to solve.
With repurposing and new shale plays emerging, there is a need to think about how the industry is going to move that added production, according to Mike Burdett, senior vice president, commercial, at EnLink Midstream LLC. At Hart Energy’s recent DUG Midcontinent Conference and Exhibition, Burdett addressed the current buildout of natural gas, crude oil and NGL infrastructure, and future needs, to a crowd of more than 1,100 attendees.
“This is truly an exciting time to be active in the Midcontinent,” Burdett said. “It’s clear there’s no shortage of opportunity on the upstream side or the midstream side.”
Burdett pointed to the “operational momentum” being realized by producers in the region, many already with focused growth plans in place. “All of this tremendous success on the upstream side presents a number of challenges from a midstream perspective, but these are exactly the kind of challenges that we really enjoy,” he told the audience.
The great success that producers have had with long laterals has resulted in extremely high flow rates. When combined with large pads, the flow rates present challenges specifically from the standpoint of timing, Burdett said. “These pads have 20 to 30 wells at a time, one or two of those coming online in proximity to each other can cause challenges to having those processing plants ready and available,” he said.
“Producers want all of their gas to flow all of the time,” he continued. “So in order for us to provide the service they expect and deserve it requires a great deal of planning and coordination to ensure we have gathering lines and processing facilities installed and online in a timely basis.”
Burdett said as a result of all of the drilling activity in the Midcontinent, the industry needs to be focused on four areas on the midstream side:
- Gas gathering and processing expansions;
- Crude gathering and takeaway expansions;
- NGL takeaway expansions; and
- Residue takeaway expansions.
Burdett said EnLink has taken steps to shore up its connections for getting NGL, crude oil and residue to demand markets. In the case of NGL, he said EnLink evaluated a number of options to getting NGL out of the Chisolm area to the Gulf Coast.
“Instead of building new we entered into long-term NGL transport contract with ONEOK to provide additional physical connectivity to Cajun-Sibon,” he said. “Clearly, this solution was immediate and required no additional capital spending. So while we like to build pipelines and do large projects, we were very excited to enter into this arrangement in order to get our NGLs from the Stack.”
He said the deal leaves EnLink with the optionality for future NGL infrastructure once Cajun-Sibon is full.
“On the crude side, I think there is less of an immediate need for new large takeaway infrastructure,” Burdett said. “There is, however, a need for more efficient means to gather crude.”
EnLink recently announced it is expanding into crude gathering with its Black Coyote crude terminal and pipeline. Burdett said the system’s initial buildout is focused on the core of the Stack play, and that it provides reliable and cost-effective transportation for customers with full-scale development production volumes. The system utilizes partners for takeaways.
Meanwhile, Burdett said Oklahoma residue is expected to increase from approximately 6.7 Bcf/d to more than 8 Bcf/d within the next few years.
Over the last few years a number of projects have been discussed to handle that takeaway, Burdett said. Cheniere’s Midship pipeline, which has a targeted startup for early 2019, will connect to EnLink’s Chisholm and Cana systems, he added.
“We are deeply committed to continuing to grow in the Stack,” Burdett said. “We’ve diversified our service offerings and about 60% of our total capex for 2017 will be spent in Oklahoma. We see more capital being directed toward Oklahoma over the next few years.”
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