Enterprise Products Partners has entered into a 10-year agreement to handle a substantial portion of Chesapeake Energy Corporation's liquids-rich natural gas production in the Eagle Ford Shale.
Chesapeake’s gross acreage position currently comprises more than 625,000 acres in and around the oil and natural gas liquids (NGL)-rich areas of the Eagle Ford Shale across Dimmit, LaSalle, McMullen, Webb, and Zavala counties located in South Texas.
The agreement provides Chesapeake with a package of midstream natural gas and NGL services, including firm commitments for gas transportation, processing, and NGL transportation and fractionation services.
Chesapeake’s NGL-rich natural gas will initially be gathered and compressed by Chesapeake affiliate, Chesapeake Midstream Development, for delivery to a central location.
Enterprise will then transport and process the gas at its existing facilities while a previously announced natural gas processing plant that is currently under development in Texas is completed.
This cryogenic processing facility, expected to be completed early in 2012, is designed for an initial capacity of 600 million cubic feet per day (mmcf/d) and with an initial capability to extract as many as 75,000 barrels per day (bpd) of NGLs.
The NGL production from Chesapeake’s gas will ultimately be transported on Enterprise’s previously announced 127-mile NGL pipeline that will extend from the new gas processing plant to Enterprise’s NGL fractionation complex in Mont Belvieu, Texas.
This new NGL pipeline, also scheduled for completion in early 2012, is expected to have an initial capacity of more than 85,000bpd and will be readily expandable to over 120,000bpd.