Enterprise Inks Deal with EnCana for Piceance Basin Production
Enterprise Products Partners L.P. says that one of its affiliates has entered into a long-term natural gas processing contract with EnCana Oil and Gas (USA) Inc., an affiliate of EnCana Corporation. Under the terms of the agreement, Enterprise will have the right to process up to 1.3 billion cubic feet per day (Bcfd) of EnCana's natural gas production in the Piceance basin area of western Colorado.
Enterprise has commenced construction of the Meeker cryogenic plant and associated facilities which are expected to begin operations in mid-2007. In the first phase, Enterprise will build a cryogenic natural gas processing plant and associated dehydration, separation, treating and compression facilities capable of processing up to 750 million cubic feet per day (MMcfd). The Meeker Plant will be located in Rio Blanco County, Colorado, at the terminus of EnCana's Piceance Basin natural gas gathering system and will be base loaded with EnCana's existing Piceance Basin rich natural gas production which currently is approximately 360 MMcfd (Gross Volume). Natural gas processed by the plant will be delivered to a broad range of downstream markets through four major current and planned natural gas pipelines including Entrega, Wyoming Interstate, TransColorado and Questar.
The Meeker Plant is designed with operating flexibility to range from conditioning mode to full recovery with the ability to recover a minimum of 2,500 barrels per day ("BPD") and a maximum of 35,000 BPD of mixed natural gas liquids ("NGLs") depending upon processing conditions and natural gas quality. A second phase of the project would include expansion of the Meeker Plant to process up to 1.3 Bcf/d with total design recovery of approximately 70,000 BPD of NGL's.
In addition to the Meeker Plant and related equipment, Enterprise will construct a 50-mile 12" NGL pipeline lateral which will interconnect the Meeker Plant with its Mid-America Pipeline ("MAPL") system which transports NGL's from the Rocky Mountain region to NGL markets located near Mont Belvieu, Texas, and Conway, Kansas. Enterprise previously announced a 50,000 BPD phase I expansion of the MAPL system in January 2005 and is expected to place the new capacity in service in the second quarter 2007. Additionally, in July 2005, Enterprise announced a new 75,000 BPD NGL fractionator, which is currently under construction near Hobbs, New Mexico, that will be supplied, in part, by the NGL's produced at the Meeker Plant.
"We are pleased to announce this long-term agreement with EnCana
Oil and Gas, which is one of the largest producers in the Piceance
basin," said Robert G. Phillips, President and Chief Executive Officer
of Enterprise. "This contract enables Enterprise to extend our natural
gas processing business to the Rocky Mountains, one of the
fastest-growing natural gas producing regions in the United States.
Natural gas production in the Piceance Basin has been increasing at a
20% compound annual growth rate over the past four years and is a
primary driver of the new processing facilities and the downstream
expansion of Enterprise's pipeline and fractionation assets serving
this region. We are pleased to have this opportunity to provide these
value added services to EnCana and other natural gas producers in the
Piceance Basin and an overall industry solution for the expected
growth of natural gas and NGL's from the Rockies."
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Company: Enterprise Products Partners LP more info
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