Condensate City – Eagle Ford Crude Infrastructure – Part 3 – Plains and Enterprise

By Q2 of 2015, the Plains and Enterprise joint venture pipeline in the Eagle Ford will carry up to 470 Mb/d of crude and condensate to market in Houston and Corpus Christi including barrels shipped from the Permian Basin on the Cactus pipeline. This pipeline expansion will easily make the two-midstream operators the largest players in the Eagle Ford market. On top of that, Enterprise already has a leg up in the race to crank up condensate exports – having recently won one of the coveted BIS letters. Today we describe recent expansions in these two company’s Eagle Ford networks.

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This is Part 3 in our series updating an analysis of Eagle Ford infrastructure. In Part 1 (see Condensate City – Finding a Home For Eagle Ford Crude) we described a five-fold increase in Eagle Ford crude oil production over the past three years to 1.5 MMb/d. We explained that unlike other basins such as the Bakken in North Dakota, takeaway capacity has not been a big challenge for Eagle Ford producers. Instead the varying quality and in particular the high percentage of condensate in liquids output (about 45 percent) has caused headaches for producers and refiners alike. We also noted that two main pipeline routes to market have developed from the Eagle Ford – south to the Port of Corpus Christi and East to Houston area refineries. In Part 2 we described the growth and continuing expansion of the crude takeaway systems developed by Magellan Midstream Partners and Kinder Morgan that provide producers and shippers multiple destinations for condensate and crude. This time we focus on the competing midstream takeaway infrastructure developed by Plains All American Pipeline (Plains) and Enterprise Product Partners (Enterprise). These two companies built out separate crude and condensate gathering systems in the Eagle Ford that are now joined by a 350 Mb/d joint venture pipeline.

Plains All American Pipeline LP

We have previously covered Plains infrastructure developments across the US. Plains is a large US midstream player that handles about 3.5 MMb/d of crude oil and natural gas liquids (NGLs) as well as storage and terminal facilities for natural gas, natural gas liquids, crude and refined products. Plains operate significant crude gathering systems in the Permian and Eagle Ford basins. We described the Plains Permian assets in Come Gather Round Pipelines Part 3 and we originally covered their Eagle Ford activities in Part 3 and Part 4 of our “Knocking on Heaven’s Door” series. We covered Plains infrastructure to move condensate from the Eagle Ford to Western Canada in Plains Trains & Diluent Deals and we also detailed their crude by rail activities in the Bakken in our Crude Loves Rock’n’Rail series in 2013.

In May 2011 Plains announced plans to build a 300 Mb/d crude and condensate pipeline from Gardendale, TX to Corpus Christi via Three Rivers. Later in 2011, Plains acquired the South Texas Gathering System from Velocity Midstream Partners that includes 15 receipt points on a 115 mile condensate gathering system in Dimmit, Webb and Maverick counties. The Velocity system delivers up to 150 Mb/d into connected storage terminals at Caterina and Gardendale. Plains has subsequently developed the Gardendale Hub – purchasing a 25 Mb/d rail loading terminal from US Development at the end of 2012 and building two 40 Mb/d condensate stabilization units with a third 40 Mb/d unit due online by Q2 2015 for a total of 120 Mb/d. Plains also purchased a 40 mile 50 Mb/d Chesapeake gathering system feeding into Caterina in 2013 and completed a 90 mile, 115 Mb/d expansion to the Velocity system in 2012 and 2013. Also in 2013, Plains reached agreement with Enterprise for a joint venture that increased capacity on the Gardendale to Corpus pipeline to 350 Mb/d and joined the Plains system to Enterprise’s Eagle Ford Crude Pipeline via a new 350 Mb/d lateral from Three Rivers to Lyssy (more on the Enterprise side of the JV in a minute). The Plains/Enterprise agreement includes joint development of a marine terminal at the Viola Barge Dock in Corpus that has capacity to load 4 * 30 MBbl barges. The map in Figure #1 below shows an overview of these assets from 2013.

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