Plains All American and Enterprise Products Announce Eagle Ford Crude Oil Pipeline Joint Venture

abarrelfullabarrelfull wrote on 07 Aug 2012 18:59
Tags: enterprise n-america pipeline plains-all-american usa

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Plains All American Pipeline, L.P. (NYSE: PAA) and Enterprise Products Partners L.P. (NYSE: EPD) today announced they have formed a 50/50 crude oil pipeline joint venture in South Texas. The arrangement provides for PAA and EPD to consolidate certain portions of previously announced pipeline projects servicing the Eagle Ford shale play in South Texas. The joint venture system is supported by long-term commitments totaling 210,000 barrels per day. The consolidation will provide shippers with increased market flexibility and enable PAA and EPD to optimize their capital investments.

The joint venture will include a 140–mile crude oil and condensate line extending from Gardendale in LaSalle County to Three Rivers in Live Oak County and continuing on to Corpus Christi, and a new 35-mile pipeline segment from Three Rivers to Enterprise's Lyssy station in Wilson County. The system, which is currently under construction, will have a targeted capacity of 350,000 barrels per day and will include a marine terminal facility at Corpus Christi and 1.8 million barrels of operational storage capacity across the system. At Lyssy, the joint venture pipeline will interconnect with EPD's existing South Texas Crude Oil Pipeline that transports crude oil to Sealy, Texas for ultimate delivery into the Houston-area refinery market. Portions of the system are expected to be placed in service in the fourth quarter of 2012, with the balance of the system expected to be placed into service in the first half of 2013. The joint venture system will be an intrastate common carrier pipeline with a posted initial base tariff rate of $1.25 per barrel from Gardendale to all destinations.

PAA will serve as the operator of the joint venture system, which will not include PAA's Gardendale Gathering System or EPD's South Texas Crude Oil Pipeline.

"We are very pleased to work with Enterprise to optimize our respective construction activities in South Texas. This joint venture provides necessary take-away capacity for the growing Eagle Ford region, while reducing capital costs and enhancing returns for both parties," said Harry Pefanis, President and Chief Operating Officer of Plains All American Pipeline. "The combined project will provide shippers with the option to deliver to Three Rivers, Corpus Christi, Houston, and with dock capabilities at Corpus Christi to access other gulf-coast markets."

"Consistent with Enterprise's philosophy of developing mutually beneficial relationships, this joint venture is a win-win solution for both companies as well as producers in the Eagle Ford Shale," said A.J. "Jim" Teague, Executive Vice President and Chief Operating Officer for Enterprise's general partner. "Combining these two projects is a more efficient use of our capital and it expands market access for our shippers."

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