Enterprise Products Partners will build a natural gas processing complex in Eddy County, New Mexico to serve growing production in the Delaware basin.
The midstream company plans to begin operating a new cryogenic natural gas processing plant in the area during the first quarter of 2016. The plant will have an initial capacity of 200mn ft3/day with possible future expansions.
Enterprise also plans to construct about 80 miles of natural gas gathering pipelines to complement its existing 1,500 miles of natural gas pipelines in the Delaware basin. The company will also build a 75-mile NGL pipeline to transport NGLs from the south Eddy plant to the company's Hobbs NGL fractionation and storage facility in Gaines County, Texas.
Once completed, Enterprise's total gas processing capacity in the Delaware Basin will total 400mn ft3/day.
The Delaware basin is the western section of the larger Permian basin, one of the oldest-producing regions of the US. The Permian is seeing a resurgence of drilling activity because of higher oil prices and the successful combination of hydraulic fracturing and horizontal drilling.
While producers in the Permian are primarily aiming for higher priced oil and liquids during drilling, they usually find associated natural gas in liquid wells. Without natural gas processing and pipelines facilities, the gas is flared. Increased flaring in the Bakken shale in North Dakota and Wyoming, and in Texas' Eagle Ford shale, has drawn the ire of residents and more recently regulators.
Enterprise's Delaware Basin gas processing announcement comes shortly after the company filed a permit with the US Federal Energy Regulatory Commission for plans to tie in the 280,000 b/d Texas Express NGL pipeline system with its Mid-American (MAPL) and Seminole pipeline systems at its Hobbs station.
The new Hobbs-Gaines origin point will give shippers on the MAPL system another option when moving NGLs from the Rocky Mountains region to the Mont Belvieu storage and fractionation hub on the Texas Gulf coast. MAPL is the primary source of NGLs for the Seminole pipeline, which extends through west Texas, connecting the Texas panhandle to Mont Belvieu.
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