Chevron Phillips - Baytown Petchem Facility to be World's Largest

Chevron Phillips announced the company is going forward with a major petro-chemical facility at the Cedar Bayou Chemical Complex in Baytown, TX. The new plant will be the world's largest on purpose 1-hexene plant and will be capable of producing 250,000,000 metric tons (551,000,000 lbs) per year. The announcement follows a release less than two weeks ago that the company will expand NGL fractionation, at the Sweeny Plant in Old Ocean, TX, to 116,000 b/d. An increase in capacity of 22,000 b/d or almost 20%.

Both developments are the direct result of growing feedstock supplies from liquids plays that produce significant volumes of NGLs. We discussed the reasoning behind new fractionation and petchem facilities in more detail in a previous article titled Eagle Ford NGLs Adding to U.S. Supply Growth.

1-hexene isn't in my normal vocabulary, but the company provided the following description.

The new 1-hexene unit at the Cedar Bayou facility will enjoy significant advantages in infrastructure, feedstock availability, and operational expertise. 1-hexene is a critical component used in the manufacture of polyethylene, a plastic resin commonly converted into film, pipe, detergent bottles, and food and beverage containers.

Construction on the petchem plant will begin soon, with a targeted completion date of early 2014.  The fractionator expansion will be complete early in 2013.

Read the entire press release at cpchem.com

Enterprise Products Adding NGL Fractionators 7 & 8 at Mont Belvieu

Enterprise Product Partners is the latest of many Eagle Ford midstream companies that are adding infrastructure to handle growing NGL production. Enterprise is already constructing its sixth fractionator at Mont Belvieu and the latest announcement comes after Dow and Shell announced plans to go forward with new petrochemical plants in the U.S. The additions will add 150,000 b/d of incremental capacity in the fourth quarter of 2013 when total capacity will be more than 610,000 b/d at the facilities. That's more than double the capacity of Enterprise's plant just two years ago. The plans are supported by growing volumes of NGL production in the Eagle Ford Shale, Rocky Mountains, and West Texas.

Expanding Enterprise's Eagle Ford Midstream Business

The company is also extending its Eagle Ford NGL pipeline (450,000 b/d ultimate capacity) to Anadarko's Western Gas Brasada Processing Plant (200 mmcfd) in La Salle County, TX. The expansion adds over 173-miles of pipe, with capacity of 140,000 b/d, that will connect to Enterprises infrastructure near the company's processing plant in Yoakum, TX. The extension gives access to the Western Gas Plant and seven other South Texas processing facilities.

As of the announcement, Enterprise had completed 375 miles of natural gas pipelines in the South Texas Eagle Ford. The company's Eagle Ford Mainline system is close to completion and will be able to deliver 900 mmcfd of rich gas to the Yoakum plant. The Yoakum plant will begin processing rich gas in May and will reach full capability by the first quarter of 2013. At that time, the plant will be able to process 900 mmcfd of gas, with capacity of 110,000 b/d of NGLs.

Including Enterprise’s seven other integrated South Texas processing facilities, the partnership will be able to offer approximately 2.4 billion cubic feet per day of processing capacity for the region when Yoakum is fully operational.

What is a NGL Fractionation?

Once NGLs are processed out of the natural gas stream, wet-gas, the individual products must be separated to be marketed and consumed. Fractionators take the NGLs to their various boiling points and separate out the individual products - ethane, butane, iso-butane, propane, pentanes, and natural gasolines. Ethane is a common feedstock for petrochemical plants and butane and propane can be used for heating or in your lighters and grills.

Chesapeake's Eagle Ford Shale Production Tops 20,000 boe/d

Chesapeake's Eagle Ford Shale asset is garnering much of the company's attention in 2012. To the tune of almost 25% of the company's capital, with 33 of the company's 161 rigs focused in the Eagle Ford. Total net production averaged a little less than 18,000 boe/d net in the fourth quarter of 2011 and current production stands at 22,600 boe/d net. Production was up 60% quarter over quarter and 370% year over year. (You can get pretty amazing growth rates running 33 rigs) Gross operated production is close to passing 50,000 boe/d and stands at a little over 45,000 boe/d. CNOOC owns a 33% interest in Chesapeake's acreage, so net will always be a close to 50% when you account for royalties and other WI owners.

The production mix is 50% crude, 20% NGLs, and 30% natural gas. That will likely stay the same for some time unless the company begins to target the natural gas rich Pearsall Shale......and that's not happening at sub-$3 gas prices.

Well performance in the Eagle Ford continues to improve.

108 wells tested with peak oil rates of 500 barrels of oil or more

The company has drilled and is producing from 178 wells and has 200 additional wells close to coming to production. That is the main reason for adding almost 350 miles of pipelines in 2011 and plans for further expansions in 2012. It will be needed for the volumes of oil and gas the company plans to bring online.

Chesapeake will also add frack crews during 2012. 7 company crews are running now and that will grow to 11 by March and 13 by year-end. That should make them virtually self sufficient when it comes to fracking Eagle Ford wells.

Chesapeake has more than 400,000 net acres in the Eagle Ford primarily located in the oil window of the Maverick Basin.

Read the company's press release at chk.com

Energy Transfer Adding 100,000 b/d Mont Belvieu Fractionation Plant for Eagle Ford Production

Energy Transfer and Regency Energy announced construction of a second Mont Belvieu fractionation facility at a cost of $350 million.  The plant will complement infrastructure being built to support the Eagle Ford Shale, Permian Basin, and Woodford Shale. Lone Star NGL, the official name of the Energy Transfer and Regency Energy partnership, will build a second 100,000 barrel per day natural gas liquids (NGLs) fractionation plant to support growing demand from liquids-rich areas in Texas and Oklahoma. A 100,000 b/d fractionator is currently under construction with a planned completion date in the first quarter of 2013 and the new fractionator will be completed in the first quarter of 2014. 

The new plant is fully contracted with long-term agreements and marks a string of major developments increasing capacity for crude and NGLs produced in the Eagle Ford.

In the past two weeks, we've had the following major announcements:

Read the entire press release tat energytransfer.com

Copano Energy Expanding the Eagle Ford's DK Pipeline To McMullen County

Copano South Texas
Copano South Texas

Copano Energy announced an additional Eagle Ford pipeline and midstream expansion related to its DK Pipeline. The company is expanding the pipeline 65-miles southwest into McMullen County. The project will begin service in the first half of 2013 and will follow the same route as the Copano and Magellan Eagle Ford Condensate Pipeline.

Total costs are estimated at $120 million and the project is supported by a long-term fee based agreement with Petrohawk Energy, a subsidiary of BHP Billiton. Copano will provide midstream gathering and handling services in exchange for committed volumes of production from BHP in McMullen County. 

Read the full release at copanoenergy.com