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Enterprise Products to build new pipeline from Permian to Houston

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Energy infrastructure giant Enterprise Products Partners said it will build a 571-mile pipeline from the Permian Basin to the Houston area to transport natural gas liquids.

The new pipeline project is another sign that West Texas is booming again with oil and gas and the Houston area is growing as the hub for those resources to either be processed or exported. Oil gets all of the attention, but the natural gas streams from the shale rock are used to create petrochemicals, electricity or other products.

Houston-based Enterprise said the planned Shin Oak NGL pipeline will start northwest of Midland in Gains County and end at its Mont Belvieu complex, where Enterprise can separate the natural gas liquids into products like ethane, propane and butane. Ethane is the primary feedstock of the Gulf Coast’s growing petrochemical sector.

“The Permian Basin is currently the hottest play in North America and is expected to continue its strong growth for years to come,” said Enterprise CEO Jim Teague in a prepared statement. “This additional pipeline takeaway capacity to Mont Belvieu will provide Permian producers the flow assurance they need to continue the unfettered development of their reserves with confidence.”

Teague is emphasizing such pipelines will ensure surging oil and gas production in West Texas won’t create bottlenecks without enough pipeline capacity to move the growing supplies.

Although drilling in the Permian is for oil, most of the wells also produce associated natural gas liquids. The extra NGLs are why producers don’t need to drill specifically for gas in West Texas. Companies like Houston-based Plains All American Pipeline are building new crude pipeline capacity, but Enterprise is focused on giving the NGLs a home.

The cost of the Shin Oak project is not being revealed. Enterprise said the pipeline is expected to be completed in 2019. It will initially transport 250,000 barrels but could be expanded to carry 600,000 barrels daily.

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Posted by Jordan Blum at Fuel Fix

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