Teak Midstream To Build Processing Plant and Pipelines In South Texas

March 2012, Vol. 239 No. 3

TEAK Midstream, L.L.C. is planning to construct more than 200 miles of natural gas gathering and residue delivery pipelines and an adjoining 200 MMcf/d cryogenic gas processing plant in south Texas to better serve gas producers operating in the Eagle Ford Shale play.

TEAK has executed 10-year firm gathering and processing agreements with Talisman Energy USA Inc. and Statoil Natural Gas LLC that support the construction of the facilities. The cost of the project is $280 million to TEAK’s interest. The company expects the facilities will be operational early in the third quarter.

The facilities will consist of two separate high-pressure gas gathering systems. One system will consist of 125 miles of 24-inch pipeline with a capacity of 600 MMcf/d and another system will consist of 20 miles of 20-inch pipeline with a capacity of 400 MMcf/d. The 125-mile system will initially originate on acreage jointly owned by Talisman and Statoil in La Salle County and will move rich gas production to TEAK’s new Silver Oak gas processing plant in Bee County, TX.

TEAK will own the first 50-mile segment of this system that will originate in La Salle County and will be called the La Salle Lateral. The remaining 75-mile segment of the pipeline, which will be called the Bee Express, will be jointly owned by TEAK and TexStar Midstream and will travel through McMullen, Live Oak and Bee counties to the Silver Oak plant as its final destination. The TEAK-owned, 20-mile pipeline system, named the Karnes Lateral, will initially originate on acreage jointly owned by Talisman and Statoil and will move rich gas production from Karnes County to the new processing plant.

The Silver Oak gas processing plant is being constructed near the community of Pettus. The facility will be equipped with state-of-the-art technology and equipment designed specifically to handle liquids-rich Eagle Ford Shale gas, which will help maximize natural gas liquids (NGL) recovery from producers’ gas streams.

The project also includes the construction of 51 miles of 20-inch residue gas pipeline that will deliver dry gas from the Silver Oak plant. TEAK plans for this pipeline to initially connect with four major downstream interstate pipelines – Tennessee Gas Pipeline, Texas Eastern, Transco and NGPL, and cross several other interstate and intrastate pipelines. TEAK will construct three miles of 12-inch-diameter NGL pipeline to transport liquids recovered at the processing plant to the DCP Sand Hills NGL pipeline, which will ultimately deliver NGLs to the Mont Belvieu fractionation complex and other fractionation facilities that will be connected to the Sand Hills pipeline along the Gulf Coast.

TEAK is offering additional capacity in its gathering systems and processing plant to other suppliers throughout the Eagle Ford Shale play. Parties interested in securing capacity in TEAK’s facilities should contact the company’s corporate office in Dallas at 214.468.8325.