12 April 2012 21:04 [Source: ICIS news]
HOUSTON (ICIS)--Plans for a new natural gas liquids (NGL) pipeline from Colorado to Texas would alleviate the surplus from shale drilling in the Rockies, analysts said on Thursday.
The proposed Front Range pipeline " will basically provide the additional capacity out of the [US] Rockies area that was lacking until now”, said analyst Anne Keller with Midstream Energy Group. “There have been attempts earlier to expand existing systems, but they didn’t come together until these parties made it happen.”
Enterprise Products, Anadarko Petroleum and DCP Midstream said on Thursday they have agreed to design and construct a 435-mile NGL pipeline from Colorado to Texas.
The Front Range pipeline would ship NGL from the Denver-Julesburg basin to Skellytown, Texas. It would be connected to the recently announced Texas Express NGL pipeline from Skellytown to Mont Belvieu near Houston.
Analyst Dan Lippe with Petral Consulting Company said production from the Denver-Julesburg basin adds to a glut of NGLs, and production will very likely increase further as a result of the pipeline project.
“Without the pipeline, production form the [Denver-Julesburg] basin would likely be shipped to Conway [a midwest NGL hub] and then down to Mont Belvieu,” Lippe said.
If the project goes forward, Enterprise would construct and operate the pipeline, which is expected to start service in the fourth quarter of 2013.
“Basically, by the time this line and the line it connects to that ties this system to Mont Belvieu is done, the means will exist to extract more ethane and other NGLs and move them to the Gulf coast where the demand is supposed to be expanding, at least in the ethylene industry for ethane,” said Keller.
Keller said much of the other NGLs will be exported.
Depending on shipper interest, initial capacity on the Front Range is expected to be about 150,000 bbl/day, with a possible expansion to 230,000 bbl/day.
The companies will determine shipper interest on the Front Range during a binding open commitment period, running from 12 April to 14 May, they said.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections