Enterprise, Enbridge and Anadarko to Jointly Develop New NGL Pipeline Linking Key Natural Gas Producing Basins to the Gulf Coast

abarrelfullabarrelfull wrote on 06 Sep 2011 14:23
Tags: anadarko enbridge enterprise ngl pipeline usa

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Enterprise Products Partners L.P. (NYSE:EPD), Enbridge Energy Partners, L.P., (NYSE:EEP) and Anadarko Petroleum Corporation (NYSE:APC) today announced an agreement to design and construct a new natural gas liquids (NGL) pipeline that will originate from Skellytown, Texas in Carson County and extend approximately 580 miles to NGL fractionation and storage facilities in Mont Belvieu, Texas. The new Texas Express Pipeline ("TEP") will help producers in West and Central Texas, the Rocky Mountains, Southern Oklahoma and the Mid-continent maximize the value of their natural gas production by providing additional takeaway capacity and enhanced access to the Gulf Coast NGL market. Initial capacity on TEP will be approximately 280,000 barrels per day (BPD), which can be readily expanded to approximately 400,000 BPD.

In addition, the joint venture will include 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. Volumes from the Rockies, Permian Basin and Mid-continent regions will be delivered to the TEP system utilizing Enterprise's existing Mid-America Pipeline ("MAPL") assets between the Conway hub and Enterprise's Hobbs NGL fractionation facility in Gaines County, Texas. Enterprise will construct and serve as the operator of the pipeline, while Enbridge will build and operate the new gathering systems. The pipeline and gathering systems are expected to begin service in the second quarter of 2013, subject to regulatory approvals.

"We are very pleased to partner with Enbridge and Anadarko on this project, which 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," said Michael A. Creel, Enterprise president and chief executive officer. "The new pipeline and gathering systems, which are underpinned by long-term contracts, will also have the capability to provide takeaway capacity for other producing areas not presently served by the MAPL system, including Oklahoma's Granite Wash, the Anadarko-Woodford basin, and the Barnett Shale. Wider access to multiple production areas, in addition to a competitive transportation fee structure, makes this an attractive option for producers and natural gas processors. NGLs controlled by affiliates of Enterprise, Enbridge and Anadarko will solidly anchor the project."

"Enbridge is also very pleased to be working with Enterprise and Anadarko on this critical NGL pipeline," said Mark Maki, president of Enbridge Energy Partners, L.P. "Through our extensive gathering and processing assets, Enbridge has developed a significant and growing NGL supply position in Texas and Oklahoma. The Texas Express Pipeline will provide guaranteed NGL access to the primary U.S. petrochemical market in Mont Belvieu, ensuring premium NGL netbacks for our customers. Importantly, the Texas Express pipeline fulfills a key strategic objective of Enbridge to extend our value chain from gathering and processing to include NGL transportation, providing Enbridge's unit holders with a new source of strong and stable cash flow."

Anadarko Vice President, Midstream, Danny Rea, said, "This project will further enhance our ability to consistently access premium Mont Belvieu markets and increase the wellhead netbacks for our growing NGL production from our Rockies and Texas assets, as well as better align our interests with the project developers through our equity participation."

While providing producers with much-needed takeaway capacity, TEP will also supply petrochemical facilities with a reliable, domestic source of feedstock. Demand for natural gas-derived feedstocks remains strong, driven by the wide spread between crude oil and natural gas prices.

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