Home on the Front Range: New NGL pipeline connects DJ Basin to Mt. Belvieu

Enterprise VP Russ Kovin found the perfect canvas at last week’s Platts Rocky Mountain Oil & Gas Conference to unveil the Front Range NGL Pipeline project.  It’s a 435 mile, 12” and 16” pipe from Weld County, Colorado to Skellytown, TX where it will connect with the existing Enterprise MAPL system and the proposed Texas Express pipeline down to Mont Belvieu.  The joint effort among Enterprise, DCP, and Anadarko, who each own 1/3rd of the project, will initially move 150 Mb/d and has expansion capacity to 230 Mb/d.  An open season kicked off on Thursday, but it is understood that the deal is already in the bag.  Target completion is the fourth quarter of 2013.  Enterprise will construct and operate the pipeline.  Press release here.  [This is Part 1 of a multi-part series based on presentations at the 6th Annual Platts Oil and Gas Conference, Denver, CO, Apr 12-13, 2012.]

DCP’s Kevin Williams also referenced the project, saying the company has been busy connecting over 200 new wells in Weld County this year.  (DCP’s new LaSalle plant is in Weld Co. as are 12 other plants owned by DCP and others.) He noted that the pipeline could be extended north into Douglas, Wyoming if shippers are interested.

Let’s look at the pipeline route.  As the map below indicates, Front Range starts in North East Colorado in Weld County.  The county seat of Weld County is Greeley, about 50 miles north of Denver and 50 miles south of Cheyenne, WY.  The pipe drops down across the Oklahoma Panhandle to Skellytown, right in the middle of the liquids rich Granite Wash. There it ties into the Enterprise MAPL system that connects Hobbs, NM with the north end of MAPL to Conway and points north.  Note that the Chaparral and Seminole pipelines from the Hobbs, NM area down to the Gulf Coast are also Enterprise pipes.

The key Front Range connection is with the Texas Express pipeline project.  This new pipe is a joint venture between Enterprise (35%), Enbridge (35%), Anadarko (20%) and DCP (10%), and will provide 250 Mb/d initial capacity to Mont Belvieu. DCP purchased its 10% last week, presumably as part of the Front Range deal. Enbridge is developing two gathering systems that will bring both Oklahoma and Texas NGL barrels to the system.  On the Oklahoma side, Enbridge’s system consists of 210 miles of 6”, 8”, 10” and 12” pipe connected to 10 different plants with a capacity of 125 Mb/d.  On the Texas side there will be 80 miles of 6” and 8” pipe connecting to five plants with a capacity of 25 Mb/d.  Texas Express is expected to be in service in Q2 2013.

What does it all mean?  In essence it means that Enterprise and its partners are going head-to-head with ONEOK’s Overland Pass expansion and possibly its Bakken NGL line.  (Bakken is the same route as the recently announced ONEOK crude oil pipeline).  The map below is from Rusty’s presentation at the Platts conference on Thursday.  It shows new processing additions (the blue bubbles; details in the text box), the route of ONEOK’s Bakken pipeline and where it connects with Overland Pass.

Here’s the bottom line.  Overland Pass goes to Conway, KS.  Front Range to Texas Express gets you to Mont Belvieu.  Certainly you can get from Conway to Mont Belvieu and ONEOK has four routes/projects (Arbuckle, and Sterling I, II, III) to get you there.  But you can expect that the Front Range folks will be talking up the ‘non-stop-to-Mont Belvieu’ advantage. (The moniker ‘Express’ is probably not a coincidence.) Makes you wonder which pipe will offer the best home for Rockies producers.  And hey, who knows what happens next.  If this pipe gets to Douglas, WY – Montana is only 200 miles further north.