Eagle Rock Energy Partners LP, Houston, (Nasdaq: EROC) has reported its intention to install a 125 MMcf/d high efficiency cryogenic processing plant in Wheeler County, Texas, in the heart of the prolific Granite Wash play. The partnership expects the installation of the new processing plant (to be named the Wheeler Plant) and construction of the associated infrastructure to be completed early in the fourth quarter of 2012.
The partnership also announced today that the construction of the 30 MMcf/d expansion of its Phoenix-Arrington Ranch Plant is now complete. The plant is expected to be fully operational at its expanded capacity of 80 MMcf/d in the coming days.
"The Wheeler Plant project is consistent with Eagle Rock's strategy to expand its existing infrastructure to accommodate volumes under new, and existing, long-term acreage dedications," says Joseph A. Mills, chairman and chief executive officer. "Combined with the Phoenix-Arrington Ranch Plant expansion and the installation of our previously-announced Woodall Plant, which is currently under construction and scheduled to be in service late in the first quarter of 2012, the addition of the Wheeler Plant will allow Eagle Rock to better accommodate our producer customers' increased drilling activity in the Granite Wash. Once the Wheeler Plant is in service, Eagle Rock will have over 300 MMcf/d of high efficiency cryogenic processing capacity in the area."
The construction of the Wheeler Plant and associated infrastructure, gathering and compression is expected to cost approximately $100 million and is expected to be accretive to the Partnership's distributable cash flow in 2013 and beyond. Eagle Rock does not anticipate downtime or reduced throughput volumes across its East or West Panhandle Systems during the completion of the project.
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