Safety, Shale, Midstream Construction Discussed At Pipeline Opportunities Conference

By Rita Tubb, Managing Editor | July 2011, Vol. 238 No. 7

Cargile started by noting that DCP Midstream had a good foot print in every one of the nation’s shale plays except the Bakken and Marcellus. “That includes the Eagle Ford Shale in South Texas,” he said. “Because of our diverse footprint and when gas prices were at $10+ per MMBtu there was a lot of activity in the Barnett and Haynesville Shale plays and we’ve benefitted from that. Now that gas prices are down to $3 to $4 per MMBtu and oil is $100 or more a barrel, everyone is chasing the oil shale in the Eagle Ford and Avalon, which has been beneficial for us as well.”POC_Cargile_11.jpg

Continuing, he said, “With our footprint we’re right on top of these shale plays and our plan is to step out and extend our footprint and integrate our systems into what we are calling super systems.”

Cargile explained that they planned to take five, six or seven plants and integrate them together to provide both flexibility and reliability. “Then we’ll move on to our new build of plants and pipelines.”

He said several hundred miles of large diameter pipe (16, 20 and 24-inch) was being constructed to gather gas supplies and integrate plants to provide operational reliability and flexibility and access to various markets.

Certainly significant is the Sandhills Pipeline project that DCP Midstream and West Texas LPG Pipeline LP (WTLPG) plan to construct to serve the NGL transportation needs of gas processing plants and shippers in West Texas and South Texas, including DCP gas plants and a new 200 MMcf/d DCP gas plant designed to serve Eagle Ford shale gas development. The 700-mile Sandhills Pipeline system will transport Y-grade NGLs from gas plants in the Permian Basin and South Texas to the various fractionator facilities along the Gulf Coast along with the Mont Belvieu, TX NGL hub.

The two companies are coordinating these projects toward a first half 2013 commencement of operations.

The final speaker in the session, Michael J. Garberding, senior vice president, business development and finance for Crosstex Energy, spent his time discussing In describing what Crosstex has done to grow in the Barnett, including the March 2011 completion of the Fossil Creek and Benbrook projects.

Of these, Garberding noted that the Benbrook project expanded the Partnership’s natural gas gathering system in North Texas with the construction of a $25 million, 15-mile pipeline extension to serve major Barnett Shale producers. It included a seven-mile low-pressure pipeline, an eight-mile high-pressure pipeline and a compressor station in southwest Tarrant County that provides customers with greater takeaway capacity to accommodate their transportation requirements. The peak flow rate of the new gathering system in 2012 is anticipated to be more than 100 MMcf/d of processable gas.

Referring to Benbrook and Fossil Creek as “bolt-on” projects, he said, “What we’ve been able to do is work with the producers, adding compression and regional gathering into our mainline system and optimize our processing and take away and provide really good projects for both the producers and Crosstex.”

* Editor’s Note: Shortly after the Pipeline Opportunities Conference, the Denali Alaska Natural Gas Pipeline project planned by BP and Conoco Phillips was cancelled and is not discussed in this article.