This is how midstreamers at the Platts conference talk about the Eagle Ford? Sounds more like a description of my wife’s Havanese after a bath than a description than one of the most prolific NGL plays on the continent. But these weren’t really complaints. It was just midstreamers pointing out some of the challenges of life in the Eagle Ford NGL business, circa 2012. And of course, these are certainly white collar problems. This is another blog based on presentations at the Platts Midstream conference. Today we’ll look at each of the three issues from the title and pick a couple of examples of solutions and strategies being used by players in the South Texas area.
Challenge #1 – Lumpy. New Eagle Ford production does not come on gradually. Wells come on with high initial production (IP) rates and high pressures, then decline rather steeply before leveling out. And that’s not all. Increasingly wells are coming on in batches from multi-well pads, sometimes 4 or 8 wells at a time. This front-end loaded production handling requirement is a challenge for gathering and processing. You can’t invest for the big slug of production only to find out that your infrastructure is overbuilt and over invested.
Challenge #2 – Soaking wet. One of the advantages that the Eagle Ford has over its cousin the Bakken is that there was already significant infrastructure in place. Unfortunately the gathering and processing infrastructure was designed many years ago for 2-3 GPM gas. Historically that’s not a bad BTU content for processors. But compared to Eagle Ford shale it is piddly (East Texas word). Eagle Ford production is 5 or 6 or 8 GPM. That means that liquids drop out of the gas and accumulate in gathering systems, cold weather wreaks havoc with freeze offs, and processing plant deethanizer towers are vastly undersized. And that’s just the issues that were mentioned off the cuff.
Challenge #3 – Moving Fast. All of this Eagle Ford NGL production is coming on faster than pipeline transportation and new gas plant construction can keep up. That means that either producers must slow down, or someone must come to the table with interim solutions.
We’ve listed three challenges so now we’ll review three example solutions that have been or are being implemented by Eagle Ford midstreamers. All of these just happened to be discussed at the conference.
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