Pipeline to move natural gas from Permian Basin to Southeast Texas should free up more oil production
Houston pipeline operator Enterprise Products Partners has started service on the Shin Oak NGL Pipeline, a project to move natural gas liquids from the Permian Basin of West Texas to a processing and storage facility in southeast Texas.This should mean less need to flare the gas and allow completion of more oil production from the Permian Basin wells. While production has been setting records it is still be restrained by the lack of infrastructure to move product to market. This should help.
Enterprise announced on Thursday morning that the mainline of the pipeline system is now in service from the West Texas town of Orla to Mont Belvieu, a southeast Texas town that has become the largest hub for natural gas liquids in the United States.
Designed and built as a 24-inch diameter pipeline, Shin Oak is starting service with an initial capacity to move 250,000 barrels of ethane, propane, butane and other natural gas liquids per day.
"The Shin Oak Pipeline represents another important addition to our expanding network of integrated midstream assets in the Permian Basin," Enterprise Products Partners CEO A.J. "Jim" Teague said in a statement. "Shin Oak provides not only a much needed takeaway option for NGLs, but facilitates growing production of other hydrocarbons in one of the most prolific producing areas in the world, and gives producers access to the most attractive domestic and global markets."
Although the mainline for the Shin Oak NGL Pipeline is in service, Enterprise still needs to complete other infrastructure for the project.
With the pipeline sourced by Enterprise's natural gas processing plant in Orla, the company is building a third processing unit that is expected to be completed by June. A separate natural gas processing plant in the Loving County of Mentone is expected to begin service by March 2020.
Combinted, the Orland and Mentone facilities will give Enterprise more than 1.6 billion cubic feet per day of natural gas processing capacity and more than 250,000 barrels of natural gas liquids production per day in the Permian Basin.
The Permian Basin upgrades are being complimented by work being done to to boost processing capacity at Enterprise's natural gas liquids fractionation plant in Mont Belvieu. Fractionation refers to process of separating different gases.