This month, midstream infrastructure projects are in bloom, and just like Gene Autry's popular American song touts, many are "Deep in the Heart of Texas." From international government expansions to joint ventures, construction projects are focused on basking in the glow of the red-hot Eagle Ford and South Texas shale plays.
One of the biggest announcements over the past month came from an unlikely direction: Mexico. According to a Houston Chronicle report, the Mexican government is forging ahead with a plan that could see some Eagle Ford and South Texas gas siphoned into Mexico's natural gas pipeline grid. The Mexican government plans to invest more than $8 billion to expand its 5,500-mile pipeline system and will focus infrastructure construction in the north and central areas of the country. Mexico, the article notes, aims to quench the country's strong thirst for energy, and many U.S. contractors are jumping at the chance to be involved, including Houston-based Kinder Morgan, which has already proposed to expand its Arizona pipeline to connect to a planned Mexican line that will run to the port of Mazatlan. Kinder Morgan's proposal, which is in need of regulatory approval, would add an additional 160 million cubic feet (MMcf) per day of gas to the already 500 MMcf per day that Mexico receives from the U.S.
Also, in late August, Kinder Morgan Energy Partners LP announced that it plans to transport Eagle Ford crude and condensate to the Phillips 66 refinery located in Sweeny, Texas. Kinder Morgan Energy Partners plans to extend its KMCC pipeline by building a 27-mile, 12-inch diameter lateral pipeline, which will initially provide Phillips 66 with 30,000 barrels per day of capacity.
Not all recent Lone Star State projects center on the Eagle Ford. Gibson Energy Inc. and GT Logistics LLC (GTL) are in preliminary talks to jointly construct and operate a 200-acre storage terminal in Port Arthur, Texas, which will utilize a GTL rail transloading facility. And just weeks after beginning construction on its Sabine Pass, Louisiana, project, Cheniere Energy Inc.'s subsidiary, Corpus Christi Liquefaction LLC is seeking regulatory approval to build three liquefaction trains, three 160,000 cubic meter (5.65 million cubic foot) full containment storage tanks and two LNG carrier docks in Corpus Christi, Texas. Dubbed the Corpus Christi Project, the liquefied natural gas export facility will also have a 23-mile pipeline constructed so it is capable of connecting to interstate and intrastate pipelines.
Elsewhere outside Texas, three major midstream players have joined forces to bring gas from the shale fields of Ohio to customers in the U.S. Midwest as well as Ontario, Canada. DTE Energy, Enbridge Inc. and Spectra Energy Corp will develop the more than $1.3 billion Nexus Gas Transmission System, which will consist of a 250-mile pipeline stretching from Ohio to Michigan and possibly beyond. The companies announced that the pipeline will utilize the vector pipeline system, and all expect the proposed system to transport up to 1 billion cubic feet per day of natural gas.
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