The new energy resource boom in southern Texas continues to drive industry planning, as three major companies recently announced extensions of their pipelines deep into the Eagle Ford shale area. All of these expansions were heralded in just the past six weeks, with many more to be announced in coming months as companies scramble to keep up with the output in the Eagle Ford area.
Southcross Energy Partners LP, for instance, reported that its natural gas pipeline extension in McMullen County would be completed by the end of October. That pipeline will be used to funnel gas to Southcross’ processing complex beginning in November, if all goes well.
Southcross is booming in its production, with gas volumes up 9% in the third quarter of 2013, and NGL sales volumes up 17% quarter to quarter.
Another giant in the industry, Kinder Morgan Energy Partners LP (KMEP), recently announced its agreement with an Eagle Ford shale producer to extend its pipeline farther into south Texas. KMEP will pour $74 million into the proposed 18-mile, 24” pipeline northwest from its DeWitt County station. The pipeline will feed into KMEP’s Gonzales County facility, where the company will build space for 300,000 bbl of storage, a pipeline pump station and facilities for truck offloading.
The pipeline will further expedite KMEP’s delivery of Eagle Ford crude and condensate to delivery points on the Houston Ship Channel. The DeWitt-to-Gonzales pipeline is one of several expansions announced by KMEP in 2013. The latest project has an estimated completion date of early 2015. As of today, KMEP has invested nearly $1 billion in Eagle Ford shale crude and condensate ventures and projects.
Not to be left behind, Plains All American Pipeline LP and Enterprise Products Partners LP also recently announced that they would be expanding their 50-50 Eagle Ford joint venture crude oil pipeline, increasing its capacity to 470,000 b/d, up from 350,000 b/d. The expansion was needed due to higher volume expected from Plains’ Cactus pipeline, which is currently under construction.
In addition, Plains will bolster its storage capacity by 2.3 million bbl in Gardendale, Tilden and Corpus Christi. All of these projects should be completed by the second quarter of 2015, according to company reports. The expansion will be done in stages as pumping capacity is added.
Plains also is building its Cactus Pipeline from McCamey to Gardendale, estimating an original capacity of 200,000 b/d and also expected to be operational by the second quarter of 2015.
Company after company is moving quickly to exploit the Eagle Ford shale formations as rapidly as possible. As all of these pipelines are being built, of course, jobs are also being created. The oil and gas industry is widely credited for keeping Texas’ state unemployment rate consistently below the U.S. average.
Many of the new jobs are being created in the Permian Basin in west Texas and the Eagle Ford shale area in southern Texas. These recent announcements of pipeline expansions and openings indicate that this second energy boom is far from over in the Lone Star State.