The year 2011 started off with a bang in the midstream-construction space. Some 4,300 million cubic feet (MMcf) per day and about 500 million barrels (bbl.) per day of capacity will be added by the end of fourth-quarter 2011. Most projects are in the Eagle Ford, Marcellus and Fayetteville shale areas, supporting the growth of production and rig counts.
CenterPoint Energy Co.’s two major projects, the Magnolia gathering system and the Olympia gathering system, are making strides as construction continues. Recently, Encana Corp. and Royal Dutch Shell Plc signed long-term contracts as customers for the capacity. The project can be expanded from 800 MMcf per day to 1.7 billion cubic feet (Bcf) per day, if needed. Although the initial 700-MMcf-per-day expansion is complete, a further expansion of 200 MMcf per day is expected to be completed in first-quarter 2011.
Also, CenterPoint’s Olympia gathering system, purchased as an existing gathering system from Encana and Shell, will expand to 280 MMcf per day, including adding 180 miles of pipe, 8,000 horsepower of compression and 680 MMcf per day of treating capacity.
Velocity Midstream Partner’s Eagle Ford shale-oil and condensate system is nearing completion of its first phase and gearing up for the second. The first phase, known as Eagle Run, consists of 74 miles of oil and condensate gathering system in Webb, Dimmit and LaSalle counties. New construction should be finished and operational by January or February of 2011. Phase 2 (known as the Eagle Eye phase) consists of 100 miles of line that will provide access to interstate interconnects when construction is complete.
Elsewhere, El Paso’s Ruby Pipeline project to move Rocky Mountain gas west to California is expected to commence in March of 2011. Global Infrastructure Partners announced plans to invest $700 million in the 1.5-Bcf-per-day project.
Also, Empire Pipeline has received a 10-year commitment for some 200 MMcf per day of capacity on it 350-MMcf-per-day Tioga County Expansion from East Resources (acquired by Shell on July 29, 2010).
Tennessee Gas Pipeline Co. has begun construction on its 350-MMcf-per-day 300 Line. One shipper has signed for the entire incremental capacity on the $750-million project.
Finally, Enterprise Products Partners LP’s Eagle Ford crude oil pipeline has been anchored by a 10-year agreement with EOG Resources Inc. Four central delivery points will be built to receive crude by trucks or gathering lines, following completion.
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