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Joint venture will double mainline capacity to 600,000 BOPD and add new deepwater marine terminal.

Plains All American Pipeline, L.P. (ticker: PAA) and Enterprise Products Partners L.P. (ticker: EPD) will construct a new condensate gathering system into their Three Rivers terminal, and double mainline capacity on the Eagle Ford Joint Venture (JV) Pipeline from Three Rivers to Corpus Christi in the third quarter of 2015.

The gathering system will have approximately 55 miles of gathering and trunkline pipeline that will connect Karnes County and Live Oak County production areas to the Three Rivers terminal. Plains and Enterprise also plan to construct an additional 70 mile, 20-inch pipeline from Three Rivers to Corpus Christi as well as expand storage and pumping capacity at Three Rivers, according to a press release. This project, in addition to previously announced expansions, will effectively loop the Eagle Ford JV Pipeline from Gardendale to Corpus Christi and increase the JV system capacity to over 600,000 BOPD.

The Eagle Ford JV Pipeline system is a 50/50 joint venture between Plains and Enterprise that delivers crude oil and condensate to the Houston-area market through a connection to the Enterprise Crude Pipeline terminal in Wilson County, Texas. This is the second expansion of the JV pipeline which was announced in September of 2013.

In addition to increasing mainline capacity, Plains and Enterprise will also be building a new terminal on the Corpus Christi ship channel to support the increased volumes to be shipped via pipeline in the region. The dock will have the capacity to handle a variety of ocean-going vessels and is planned to be in service by 2017. Currently, Enterprise’s Houston ship terminal has a NGL import/export capacity of 14 MBOE/hr.

Source: Enterprise Sept. 2013 Presentation

Source: Enterprise Sept. 2013 Presentation

Oil & Gas 360® spoke to Rick Rainey, Enterprise’s Vice President of Public Relations, about the announcement. When asked about the importance of the new Corpus Christi terminal Rainey told Oil and Gas 360®, “We’re already exporting condensate, and this would give us another outlet in Corpus Christi.” The new port would put Enterprise in a strong position to expand its global exports, Rainey said.

In July, Enterprise made headlines along with Pioneer Natural Resources (ticker: PXD) as the first two U.S. companies to win federal approval to export condensate abroad. Condensates are processed and are not considered to be in the same category as crude oil, according to Department of Commerce definitions. U.S. crude oil is presently restricted from export by a four decade old export ban.

Enterprise now exports processed condensate from its berths in Texas City, Freeport and the Houston Ship Channel, according to Reuters.

With the Energy Information Administration (EIA) expecting further increases in the level of oil production from the Eagle Ford region, projects like the Eagle Ford JV Pipeline will hopefully prevent similar problems from occurring in Texas. The EIA report shows an expected increase of 35,000 BOPD month-over-month, which the Eagle Ford JV Pipeline will help transport downstream.

These and other pipelines will move oil and natural gas liquids to Houston, which is “becoming a storage hub and terminal center for the Gulf Coast,” the Oil & Gas Journal pointed out in a report earlier this year. “Rail shipments of Bakken crude oil into St. James, La., will likely cease in the coming months as these refineries become increasingly well supplied with light sweet crude from the Eagle Ford shale and Permian basin. … Another 700,000 b/d of light sweet crude oil delivered onto the Gulf Coast will not only finish backing out all light sweet imports, it will also fundamentally change the gulf’s crude flow. … EPRINC projects major pipeline flows into the Houston area will reach more than 3 MMBOPD by yearend,” the report said.

Plains All American Pipeline owns and operates approximately 18,000 miles of crude oil and refined product pipelines, 119 million barrels of crude oil and NGL terminalling and storage capacity and a full complement of truck transportation and injection assets. Their partner in the Eagle Ford JV Pipeline, Enterprise Products, has 51,000 miles of pipelines, 200 MMBbls of NGL, refined products and crude oil storage capacity, 14 Bcf of natural gas storage capacity, 22 NGL and propylene fractionators, 6 offshore hub platforms and 176 marine barges.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.