One of the older gas gathering and processing firms serving South Texas is moving into a new line of business – handling growing volumes of crude oil and condensate coming out of the Eagle Ford.
James E. Wade, president and chief operating officer at Copano Energy LLC, reminded the midstream track at the DUG Eagle Ford conference that the firm dates to 1992 – well before the Eagle Ford became a hot play – when founder John Eckel Jr. purchased a pipeline to move his production from Copano Bay on the Texas Gulf Coast to market.
That origin has created “a producer-focused, producer-friendly company with win-win solutions for its customers,” Wade said. But the company’s most rapid growth has come recently, thanks to the Eagle Ford.
“You’ve heard why the Eagle Ford is one of the best plays in North America, and that’s why Copano decided to spend over $1 billion by the middle of next year on organic growth projects in this play,” he told conference attendees.
“We focused on the condensate window of the shale where our assets were,” Wade added. “We were fortunate to be a first mover in this play.”
Its existing gathering systems fed into Kinder Morgan’s 30-inch Laredo-to-Katy pipeline that delivered gas to Copano’s Houston Central Complex in Colorado County, Texas. But where would all the new natural gas liquids (NGLs) go?
“When we got started, we like everybody else, looked to Mount Belvieu for the solution. But Houston got in the way,” Wade said with a chuckle.
The cost-competitive answer proved to be processing gas at Copano’s own facility. Copano already has a 200 million cubic feet per day (MMcfd) cryogenic plant and a 500 MMcfd lean-oil plant. Now it it’s adding a 400 MMcfd cryogenic plant, expected to go online in the first quarter of next year. Also, permitting has started on a second 400 MMcfd unit, expected to be completed in the middle of 2014. They’re matched with a 44,000 barrel-per-day (b/d) fractionator at the complex, plus the firm will have access to a new 75,000 b/d fractionator Energy Transfer Partners LP will complete by the end of first-quarter 2013.
But Copano’s biggest project is the 100,000 b/d Double Eagle Gathering System. It’s working with Magellan Midstream Partners LP to move crude and chemical-grade condensate to Magellan’s terminal on Nueces Bay at Corpus Christi, Texas. The terminal also will gain 400,000 barrels of new storage.
Key to the project is conversion of an under-used natural gas pipeline between Three Rivers, Texas, and Corpus Christi. The first portion of the system in Karnes County is scheduled to go online next February. A western leg to the Gardendale area is scheduled for the middle of 2013.
“It’s been an interesting process,” Wade added. “This is a new business line for Copano Energy. We’ve always been a gatherer and processor of natural gas in South Texas and other places, but the crude oil and condensate project is something that our producers need and it’s something we can bring fairly quickly to the market.”