Regency Energy Partners announced June 2 that it has entered into agreements to provide gas and condensate gathering services for a producer in the Eagle Ford Shale.
Regency has agreed to construct facilities to perform these services, including a wellhead gathering system, at an expected cost to Regency of approximately $450 million. The Eagle Ford Expansion will be owned and operated by Regency and will tie into Regency’s existing gathering system. In addition, Regency has purchased certain existing midstream assets located in the Eagle Ford Shale that will be owned and operated by Regency as part of the EF Expansion.
Upon completion, Regency’s entire south Texas system will be capable of gathering, compressing, treating and transporting up to 1 Bcf/d of natural gas and 26,500 Bbls/d of condensate to downstream outlets.
When fully developed, the EF Expansion will include:
• the construction of a 400-mile wellhead gathering system on 150,000 acres of dedicated acreage in Webb, Dimmit and LaSalle counties in south Texas;
• the installation of 125,000 horsepower of compression; and
• the construction of four gas and condensate export terminals.
“The EF Expansion significantly broadens our south Texas gathering platform in the Eagle Ford Shale and positions Regency to offer similar services to other key producers in this prolific shale play,” said Keith Crawford, regional vice president of Regency. “The EF Expansion is fully contracted and underwritten by long-term, fee-based contracts with minimum volume commitments. In addition, the midstream assets purchased will provide immediate cash flow.”
Regency also announced an expansion of its Tilden Treating Facility to meet increasing producer demand in the Eagle Ford Shale. Upon completion, the Tilden Expansion will provide an incremental 20 MMcf/d of treating capacity to the facility, which is strategically located in McMullen County, Texas, an area experiencing higher sour gas volumes associated with increasing Eagle Ford Shale production. The Tilden Expansion is supported by long-term, fee-based volume commitments and expected to be completed in the fourth quarter of 2011.