HOUSTON--(BUSINESS WIRE)--Enterprise Products Partners L.P. (NYSE: EPD) today announced it has purchased from Trinity Pipeline L.P. a 39-mile carbon dioxide pipeline which will be converted to crude oil service in connection with the partnership’s strategy to expand its gathering system in the Permian Basin of West Texas. The 8-inch diameter pipeline, which extends from Reeves County, Texas to Lea County, New Mexico, has a capacity of approximately 54,000 barrels per day (BPD) of crude oil. The newly acquired asset will provide a growing number of major producers in the promising Bone Springs/Avalon Play with an important outlet for their crude oil through a link to the Basin Pipeline. Accessing the Basin system will allow shippers to reach other key areas of Enterprise’s integrated energy network, including major storage facilities at Midland, Texas and Cushing, Oklahoma.
Enterprise Executive Vice President and Chief Operating Officer A.J. “Jim” Teague said, “The emerging Bone Springs/Avalon Play offers visibility to crude oil and rich natural gas opportunities, yet the infrastructure necessary to support the increased production activity is underdeveloped. In that regard, the Bone Springs/Avalon play shares some similarities with the Eagle Ford Shale play in South Texas, where Enterprise holds a growing position as a midstream services provider. This strategic acquisition provides us with a foothold should we decide to expand our midstream network to meet projected growth in the area.”
The Bone Springs/Avalon Play is characterized by an interval of shale, sandstone and limestone up to 2,000 feet thick. Prospective production has been identified in multiple horizons on more than two million acres throughout Eddy and Lea counties in New Mexico and Reeves, Loving, Ward and Culberson counties in Texas. Enterprise’s own estimates suggest that crude oil production of 120,000 BPD and natural gas production of 500 million cubic feet per day is possible by 2018 based on 400 wells drilled per year. There are currently 30 rigs operating in the play.
In conjunction with the acquisition, Enterprise will build a central delivery point and associated infrastructure for receiving truck deliveries of crude oil and transporting it to the Basin Pipeline. Construction of the new facilities and conversion of the pipeline to crude oil service is expected to be completed by the end of 2011.
Enterprise Products Partners L.P. is the largest publicly traded partnership and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. EPD’s assets include approximately: 50,200 miles of onshore and offshore pipelines; 192 million barrels of storage capacity for NGLs, refined products and crude oil; and 27 billion cubic feet of natural gas storage capacity. Services include: natural gas transportation, gathering, processing and storage; NGL fractionation, transportation, storage, and import and export terminaling; crude oil and refined products storage, transportation and terminaling; offshore production platform; petrochemical transportation and storage; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems and in the Gulf of Mexico.
This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical fact, included herein that address activities, events, developments or transactions that EPD expects, believes or anticipates will or may occur in the future, including anticipated benefits and other aspects of such activities, events, developments or transactions, are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including required approvals by regulatory agencies, the possibility that the anticipated benefits from such activities, events, developments or transactions cannot be fully realized, the possibility that costs or difficulties related thereto will be greater than expected, the impact of competition and other risk factors included in the reports filed with the Securities and Exchange Commission by EPD. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except as required by law, EPD does not intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.