Enterprise said that it is in discussions with other producers to provide crude oil transportation services through additional connections to the pipeline. When completed, the company’s crude oil pipeline system will provide access to the refining markets in the Houston area, as well as the major storage hub in Cushing, Oklahoma, through the company-operated Seaway pipeline.
The capacity of the new crude oil pipeline will be sized to serve multiple producers as output in the Eagle Ford Shale region continues to increase, Enterprise said.
In addition to the pipeline infrastructure, Enterprise is also constructing central delivery points in three locations along the new pipeline to receive crude oil from gathering lines and trucks. Two of the delivery points will be located in Karnes County, while the third will be built in Gonzales County. This crude oil pipeline expansion project is expected to be completed in the fourth quarter of 2011.
The LOI also contains a natural gas component, which includes a seven-year natural gas transportation and processing agreement. Enterprise claims that it is developing significant additions to its natural gas gathering, processing and storage system and its NGL transportation and fractionation network serving South Texas producers.
In addition to the recent initiatives to increase NGL fractionation capacity at the company’s Mont Belvieu, Shoup, and Armstrong facilities, expansion plans are expected to include additional natural gas processing and NGL pipeline infrastructure.
According to Enterprise, activity in the Eagle Ford Shale continues to exceed industry expectations as the approximately 50 rigs working in the play have drilled more than 130 wells. Current production from the play is estimated at approximately 190 million cubic feet per day of natural gas and 10,000 barrels per day of crude oil. Enterprise is also in various stages of negotiations with other producers to provide midstream services.
