Meritage Midstream Services, LLC plans to build a new rich-gas gathering system in Webb County, TX. Escondido Resources II, LLC will serve as the system’s anchor tenant and will also have firm capacity on Meritage’s existing Eagle Ford Escondido Gathering System to move its Eagle Ford volumes. Escondido Resources will dedicate 33,000 acres to Meritage including deep and shallow rights in the Eagle Ford, Escondido and Olmos formations.
Known as the Cuervo Creek Pipeline, Meritage’s rich-gas gathering system will cover more than 1,300 square miles from Encinal south to Laredo. The 60-mile system will include multiple downstream interconnects, providing Meritage customers with numerous options for moving rich gas to high value markets out of the multizone, rich-gas developments taking place in the region, including the Eagle Ford shale.
The 16-inch Cuervo Creek Pipeline will have initial capacity of 150 MMcf/d and should be in service later this year. Meritage expects to increase its rich-gas gathering capacity in 2012 to accommodate the fast-developing shallow gas play.