Sherman Extension Pipeline
PETAL GAS STORAGE MISSISSIPPI
Import/Export Terminal
Houston Ship Channel
Stretching across 14 counties and over seven million acres in the Fort Worth Basin of North Texas is the Barnett Shale play — one of the largest unconventional natural gas resource plays in North America. According to the United States Geological Survey, the Barnett Shale has a resource potential of 26 trillion cubic feet. With approximately 195 rigs and 8,800 wells working to develop the acreage, current natural gas production is estimated at 3.7 Bcf/d.
SHERMAN EXTENSION PIPELINE
In November 2006, Enterprise embarked on a new growth initiative, providing much needed pipeline takeaway capacity from this growing region by expanding its Texas intrastate pipeline system. The Sherman Extension, a new 178-mile, 30- and 36-inch diameter pipeline, will originate at Enterprise’s Texas intrastate pipeline in north Texas and extend through the heart of the Barnett Shale area to Sherman, Texas where it will connect with an interstate pipeline which is being developed by others.
Scheduled for completion in the fourth quarter of 2008, Sherman Extension will have the capacity to transport up to 1.1 Bcf/d of natural gas. Its connection with the Gulf Crossing Pipeline will provide shippers access to multiple delivery points in Louisiana, Mississippi and Alabama that, in turn, offer access to attractive markets including those in the southeastern and northeastern United States via connections with interstate pipelines and with Enterprise’s Petal natural gas storage facility in Mississippi.
Anchored by a long-term transportation contract with Devon Energy, the largest producer in the Barnett Shale, the Sherman Extension can also provide increased capacity for natural gas volumes coming from the west Texas Permian Basin area and the east Texas Bossier Shale play.
NATURAL GAS STORAGE
With access to major pipeline systems serving high-demand markets in the southeastern and northeastern United States, Enterprise’s underground storage facility in Petal, Mississippi offers customers the ability to maximize the value of their supplies. Over the past year, the partnership has emphasized the importance of Petal with initiatives designed to expand its natural gas storage capacity.
In August of 2007, Enterprise converted an NGL cavern to natural gas service, adding 1.6 Bcf of working gas capacity that is fully subscribed under long-term contracts. Additionally, a new 5 Bcf cavern is under construction and projected to be in service in June of 2008, with 3.2 Bcf already under contract. Final arrangements are in process for the remainder of the capacity. The strong demand for natural gas storage services led Enterprise to file for authority with the Federal Energy Regulatory Commission to develop two additional caverns at Petal, each with a capacity of 5 Bcf. The first 5 Bcf of capacity is expected to be in service as early as the summer of 2010.
The partnership is developing a new 5 Bcf cavern at its Wilson storage facility in Wharton County, Texas. Projected to be in service by the second quarter of 2010, more than half of the capacity is committed to CenterPoint Energy under a long-term contract.
IMPORT/EXPORT TERMINALING SERVICES
Included in NGL operations are the partnership’s import and export facilities located on the Houston Ship Channel. Industry sources expect imported LPGs to more than double over the next three years. In June 2007, Enterprise completed an expansion of its import and export terminals to handle incremental volumes of NGLs and liquefied petroleum gases (LPGs). The expansion doubled the offloading capacity of the facility from 240 MBPD to 480 MBPD and gives it the flexibility to simultaneously unload product from two vessels or two separate products from the same vessel. In addition, the terminal’s maximum loading rate for exports has increased 14% from 140 MBPD to 160 MBPD. As part of the $60 million initiative, Enterprise increased the capacity on its pipelines that connect the terminal to the partnership’s fractionation and storage complex at Mont Belvieu, Texas. To accommodate the additional volumes, Enterprise recently increased Mont Belvieu’s capacity to fractionate mixed butanes by 20 MBPD. The partnership now has the capability to separate up to 300 MBPD of imported mixed and domestic butanes, as well as butanes sourced from its isomerization facility at Mont Belvieu.
Available import capacity before the expansion of the terminal was substantially subscribed under long-term contracts. The incremental volumes resulting from the expansion will facilitate increased supplies of LPGs into the United States. The nominal capital costs required to expand the terminal and related assets reflect Enterprise’s successful strategy of planning for future growth when designing and constructing the facilities in the mid-1990s.