In November Houston-based Kinder Morgan announced a joint venture with Copano Energy to create a natural gas gathering system in Texas’ booming Eagle Ford shale region.
Today, they’re expanding the JV.
Under the new deal, Eagle Ford Gathering will provide another 200,000 MM/Btu per day of gathering and processing capacity to producers by building additional pipeline facilities and through a long-term agreement with Formosa Hydrocarbons Co. for more processing and fractionation services.
In addition to 111 miles of pipeline currently under construction, Eagle Ford Gathering will build a 54-mile, 24-inch diameter crossover pipeline between existing Kinder Morgan pipelines, and an additional 20-mile, 20-inch diameter pipeline that will enable the joint venture to deliver gas to Formosa.
Kinder Morgan will construct and operate the two additional pipelines. Eagle Ford Gathering recently executed an agreement with Formosa to support its gas processing and fractionation needs, and expand operational flexibility.
Kinder Morgan and Copano will invest about $100 million to build the crossover pipeline and related facilities with plans to finish the new facilities by the end of 2011. That’s on top of the $175 million, 30-inch pipeline previously announced.
Removing natural gas liquids from production in the Eagle Ford is key since much of the area is considered “wet” and thus difficult to move through pipelines.
How hot is the Eagle Ford? Along with other shale production, it’s helping to turn the U.S. into an energy exporter for the first time in many years, with plans to export more liquefied natural gas from Gulf LNG terminals than is being shipped in.