Enterprise Products Partners L.P. (EPD), Enbridge Energy Partners L.P., (EEP) and Anadarko Petroleum Corporation (APC) have jointly agreed to build a new natural gas liquids (NGL) pipeline called the Texas Express Pipeline (TEP). The pipeline will originate from Skellytown, Texas in Carson County and extend about 580 miles to NGL fractionation and storage facilities in Mont Belvieu, Texas.
The new Texas Express Pipeline will connect West and Central Texas, the Rocky Mountains, Southern Oklahoma and the Mid-continent. Initial capacity on TEP will be approximately 280,000 barrels per day (Bbls/d), which can be readily expanded to approximately 400,000 Bbls/d.
The companies expect the construction of this pipeline to be beneficial to producers in the coverage areas as they can maximize the value of their natural gas production using the additional takeaway capacity provided by the pipeline. Moreover, the pipeline will help enhance access to the Gulf Coast NGL market.
The agreement among the oil companies also includes the construction of two new NGL gathering systems. The first will connect TEP to natural gas processing plants in the Anadarko/Granite Wash production area located in the Texas Panhandle and Western Oklahoma. The second NGL gathering system will connect the new pipeline to Central Texas, Barnett Shale processing plants.
Furthermore, the companies said the TEP system will also connect to Enterprise’s existing Mid-America Pipeline (MAPL) assets between the Conway hub and Enterprise’s Hobbs NGL fractionation facility in Gaines County, Texas. This connection will help the TEP system to get volumes delivered from the Rockies, Permian Basin and Mid-continent regions.
As per the joint venture agreement, Enterprise will be responsible for the construction of the pipeline and its operation, while Enbridge will build and operate the new gathering systems. The companies expect the pipeline and gathering systems to begin operation in the second quarter of 2013, pending regulatory approvals.
Each of the partners in the joint venture is positioned to collectively benefit from the construction of the Texas Express pipeline, which will enhance their footprint in Texas as well as help them expand into new markets. The project offers a comprehensive industry solution for addressing NGL transportation constraints that are currently limiting access to the largest domestic NGL market located along the Gulf Coast.
The companies expect the new pipeline and gathering systems, which are underpinned by long-term contracts, to provide wider access to multiple production areas. Additionally, a competitive transportation fee structure makes the pipeline an attractive option for producers and natural gas processors.
ANADARKO PETROL (APC): Free Stock Analysis Report
ENBRIDGE EGY PT (EEP): Free Stock Analysis Report
ENTERPRISE PROD (EPD): Free Stock Analysis Report
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