Enterprise Products Partners LP, Houston, (NYSE: EPD) reports that its affiliates have signed new long-term agreements with major producers in the Barnett shale region that will use about 900 million cubic feet per day of capacity on the partnership’s 1.1 billion cubic feet per day Sherman Extension natural gas pipeline.
The partnership also announced that it will construct a pipeline that will transport new supplies of gas from the Barnett shale in Tarrant and Denton counties, Texas to the Sherman Extension pipeline.
Enterprise chief executive Michael A. Creel says the 178-mile Sherman Extension is a major expansion of Enterprise’s Texas intrastate pipeline system that provides additional transportation capacity for production from the Barnett shale and North Texas region.
The Sherman Extension traverses from an interconnect with a major pipeline segment of Enterprise’s Texas intrastate system in Erath County, Texas, to Grayson County, Texas, where it will connect to the Gulf Crossing interstate pipeline. The Sherman Extension is expected to be completed in the fourth quarter.
Creel says that to accommodate growing gas production from the Barnett shale, Enterprise will build a new 40-mile supply lateral that will extend from the Trinity River Basin north of Arlington to an interconnect with the Sherman Extension pipeline near Justin, Texas. This new line will consist of 30-inch and 36-inch diameter pipeline designed to provide up to 1 billion cubic feet per day of takeaway capacity for producers in Tarrant and Denton counties. This new pipeline will also have a lateral to provide transportation services for natural gas produced from the Newark East field in Wise County. These new pipelines are anchored by long-term agreements with major producers and are expected to be in service in the third quarter of 2009.
“The Barnett shale continues to exceed expectations,” Creel says. “Production from the Barnett Shale currently exceeds 4 billion cubic feet per day and is expected to increase to approximately 6 billion cubic feet per day by 2011. We believe the Sherman Extension and the pipeline lateral into the Trinity River Basin will provide producers valuable transportation capacity for their production. Given the expected growth in the region, we are evaluating the need to expand the Sherman Extension beyond its current planned capacity of 1.1 billion cubic feet per day.”
Earlier this month, Enterprise completed a 42-mile section of the Sherman Extension from Erath County to Parker County, Texas and commenced interim transportation service on the Sherman Extension to markets utilizing Enterprise’s Texas intrastate system.
Enterprise Products Partners has an enterprise value of approximately $21 billion and transports gas, natural gas liquids, crude oil and petrochemical products through more than 35,000 miles of onshore and offshore pipelines. JAS
