Western Gas Partners in a joint venture with Enterprise Products Partners has acquired 25% interest in two under-construction fractionation trains 7 and 8 in Mont Belvieu, Texas, US.
Enterprise will operate the newly acquired trains, which are expected to become operational by the end of 2013.
Western Gas’ interest will be recorded as an equity investment on its balance sheet, while it is expected to invest about $120m in 2013 to fund its pro-rata share of the construction costs.
The company is also set to begin construction of a second cryogenic processing train at its Lancaster plant in the DJ Basin (Lancaster II) in 2013.
Lancaster II will be built with a capacity of 300 MMcf/d and a throughput of 200 MMcf/d.
The cost of the second cryogenic train is estimated to be $165m, of which 50% will be spent in 2013 and the remaining will be invested by 2015.
Western Gas’ new train is slated to start operations in the first quarter of 2015, while the Partnership currently projects an estimated base case return of 17-24% for the project.
The company has already secured air permits for Lancaster II from the Colorado Department of Public Health and Environment, and has placed orders for major processing components.