Enterprise Products Partners acquired a 70% interest in the 265-mile Rio Grande Pipeline, which it currently operates from a subsidiary of Holly Energy Partners LP for an undisclosed sum. The remaining 30% will be retained by BP.
The pipeline transports a mix of butane and propane and runs from Enterprise’s Mid-America pipeline that is fractionated at the Hobbs facility. The Rio Grande line has a capacity to transport up to 25,000 barrels per day of NGLs as it runs from Odessa, Texas to a Pemex-owned interconnect south of El Paso that runs to the Mendez terminal near Juarez, Mexico.
“This transaction serves as yet another strong example of our ability to capitalize on the opportunities created by our integrated midstream energy network to efficiently provide value-added services for customers and accretive cash flow for Enterprise investors,” said Michael Creel, the company’s president and chief executive officer.
Enterprise also provided an update on its two pipeline projects in the Eagle Ford shale that will increase transportation out of the shale by over 200 million cubic feet per day (MMcf/d) when they are brought online in Q1 2010.
The 62-mile White Kitchen lateral will run from LaSalle and Webb counties in the Eagle Ford and connect with two separate lines at opposite ends of the play that are connected to the company’s South Texas pipeline system.
The company anticipates portions of this lateral to be online later this month with a second expansion occurring in Q2 2010 that will increase the capacity of the lateral to over 200 MMcf/d.
Enterprise officials also announced that the company is currently developing the first portion of an east-west mainline in the play. The 34-mile, 24-inch segment will connect the South Texas pipeline in LaSalle County to the White Kitchen lateral. This segment is expected to come online in Q2 2010.
“With exploration and production activity in the Eagle Ford ramping up quickly, it is essential that midstream infrastructure and services be able to keep pace. Enterprise recognized the potential of this play early and we have already responded by placing steel in the ground and are developing other projects that will complement our existing integrated network of South Texas assets and could start providing value-added services for producers within a matter of months,” Jim Teague, executive vice president and chief commercial officer for Enterprise, said in a release. – Frank Nieto
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