Enterprise Products Partners L.P. (EPD) and certain of its subsidiaries have entered into 10-year agreements with each of Pioneer Natural Resources USA Inc., Reliance Eagleford Upstream Holding LP and Newpek, LLC (collectively, the “Pioneer JV”) to provide a full scope of midstream energy services to handle natural gas and crude oil production from the Pioneer JV’s acreage in the Eagle Ford Shale play in South Texas.
The Pioneer JV’s natural gas will initially be processed using Enterprise’s existing Gulf Coast facilities until it can be processed at Enterprise’s previously announced natural gas processing plant under development in South Texas. The cryogenic facility is designed for an initial capacity of 600 MMcf/d and initially will have the capability to extract as much as 60,000 bpd of NGLs. Completion of the processing plant is expected in 2012.
The Pioneer JV’s NGL production will ultimately be transported on Enterprise’s new 127-mile NGL pipeline that will extend from the new natural gas processing plant to Enterprise’s complex at Mont Belvieu, TX. The new NGL pipeline will have an initial capacity of more than 60,000 bpd, which can be readily expandable to over 120,000 bpd, and is also scheduled for completion in early 2012.
To accommodate the additional NGLs, Enterprise has announced construction of a fifth NGL fractionation train at Mont Belvieu. The new 75,000-bpd fractionator is scheduled to be in service in early 2012. In addition, Enterprise’s fourth NGL fractionation train, which also has a capacity of 75,000 bpd, is scheduled to begin operations shortly. The addition of these two new fractionation units will increase Enterprise’s total NGL fractionation capacity at Mont Belvieu to 380,000 bpd.
As part of the crude oil agreements, Enterprise will construct 100 miles of supply laterals that will deliver crude oil production from the Pioneer JV into the new 140-mile pipeline Enterprise announced earlier.
The Pioneer JV’s producing area in the Eagle Ford Shale covers over 300,000 gross acres in McMullen, Atascosa, Live Oak, Bee, Karnes and DeWitt counties. The gathering lines required to link the producing wells to Enterprise’s midstream assets will be provided by EFS Midstream LLC, a joint venture between Pioneer and Reliance. The agreements with Pioneer and its JV partners mark the fourth major midstream deal Enterprise has executed with Eagle Ford producers in the past year.