Enterprise to Extend Eagle Ford Shale Crude Oil Pipeline System as Part of Long-Term Transportation Agreement with Chesapeake Energy Corporation Affiliate
Enterprise Products Partners L.P. (NYSE:EPD) today announced plans to
build an 80-mile extension of its 350,000 barrel per day (BPD) Eagle
Ford Shale crude oil pipeline, that would allow the partnership to serve
growing production areas in the southwestern portion of the play. The
Phase II project would originate in Wilson County, Texas at the terminus
of the partnership′s previously announced 140-mile Phase I segment, and
extend to a site near Gardendale, Texas in La Salle County, where a new
central delivery point (CDP) is planned for construction that will
feature 500,000 barrels of storage. Phase I is on schedule to begin
service by the second quarter of 2012, with Phase II set to commence
operations in the first quarter of 2013. When completed, the
approximately 220-mile crude oil pipeline system will provide Eagle Ford
Shale producers with access to the Texas Gulf Coast refining complex
through Enterprise′s integrated midstream network.
The Phase II extension, which is being designed with a capacity of
200,000 BPD, is anchored by a 10-year agreement with Chesapeake Energy
Marketing, Inc. ('Chesapeake?), a subsidiary of Chesapeake Energy
Corporation (NYSE:CHK), that Enterprise also announced today. As part of
the long-term contract, Chesapeake has committed to 100,000 BPD of firm
crude oil transportation capacity.
'We are very pleased to expand our relationship with Chesapeake in the
Eagle Ford Shale by adding crude oil transportation to the various
natural gas services Enterprise is already providing under long-term
contracts,? said A.J. 'Jim? Teague, executive vice president and chief
operating officer of Enterprise′s general partner. 'Including the
Chesapeake agreement, we now have producer commitments for nearly all of
the available capacity on Enterprise′s Eagle Ford crude oil pipeline,
with 320,000 BPD under 10-year contracts.?
With more than 2.5 million acres under lease and potentially 15,000
wells to be drilled over the production life of the Phase II service
area?based on the partnership′s own research and information from
producers?development activity in this region of the Eagle Ford Shale is
expected to remain brisk for the foreseeable future. Estimates provided
by producers also suggest that up to 3 billion barrels of crude oil are
recoverable in the southwestern region of the play.
The Phase II project would address the lack of pipeline infrastructure
in the southwestern crude oil production region of the Eagle Ford Shale
and provide shippers with access to Enterprise′s Sealy, Texas delivery
point. The Sealy facility interconnects with the partnership′s Rancho
Pipeline and feeds into Enterprise′s new ECHO crude oil storage terminal
being constructed at a location along the Houston Ship Channel in
southeast Harris County, Texas. The pipeline options available to
shippers via the terminal would provide access to more than two million
BPD of refining capacity in the Houston area.
Teague further stated, 'Typical of the strategy that has positioned
Enterprise as a key provider of midstream services in the Eagle Ford
Shale, this latest agreement leverages our existing integrated network
of assets to create a cost-effective and timely solution that will allow
Chesapeake to maximize the value of their production by providing access
to the largest refining market in the world.?
Approximately 165 rigs are presently working in the Eagle Ford Shale,
which have drilled more than 1,200 wells. Current production from the
play is approximately 100,000 BPD of crude oil and condensate.
Enterprise Products Partners L.P. is the largest publicly traded
partnership and a leading North American provider of midstream energy
services to producers and consumers of natural gas, NGLs, crude oil,
refined products and petrochemicals. EPD′s assets include approximately:
50,200 miles of onshore and offshore pipelines; 192 million barrels of
storage capacity for NGLs, refined products and crude oil; and 27
billion cubic feet of natural gas storage capacity. Services include:
natural gas transportation, gathering, processing and storage; NGL
fractionation, transportation, storage, and import and export
terminaling; crude oil and refined products storage, transportation and
terminaling; offshore production platform; petrochemical transportation
and storage; and a marine transportation business that operates
primarily on the United States inland and Intracoastal Waterway systems
and in the Gulf of Mexico.
This press release includes 'forward-looking statements? as defined
by the Securities and Exchange Commission. All statements, other than
statements of historical fact, included herein that address activities,
events, developments or transactions that EPD expects, believes or
anticipates will or may occur in the future, including anticipated
benefits and other aspects of such activities, events, developments or
transactions, are forward-looking statements.These
forward-looking statements are subject to risks and uncertainties that
may cause actual results to differ materially, including required
approvals by regulatory agencies, the possibility that the anticipated
benefits from such activities, events, developments or transactions
cannot be fully realized, the possibility that costs or difficulties
related thereto will be greater than expected, the impact of competition
and other risk factors included in the reports filed with the Securities
and Exchange Commission by EPD.Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak
only as of their dates.Except as required by law, EPD does not
intend to update or revise its forward-looking statements, whether as a
result of new information, future events or otherwise.
Enterprise Products Partners L.P.
Randy Burkhalter,
713-381-6812 or 866-230-0745
Investor Relations
Rick
Rainey,713-381-3635
Media Relations
