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Enterprise To Expand Oil, Gas Pipelines In Eagle Ford Shale


NEW YORK -(Dow Jones)- Enterprise Products Partners (EPD) said Monday that the company plans to expand its network of crude oil and natural-gas pipelines in the Eagle Ford Shale in South Texas and has a signed a preliminary agreement with a "major" producer in the region.

Under a long-term transportation agreement with the producer, which Enterprise didn't name, Enterprise would construct a 140-mile crude-oil pipeline from Karnes County to Austin County. The project would provide access to refining markets in the Houston area, as well as the major crude-oil storage hub in Cushing, Okla. Enterprise, which expects the project to be completed in the fourth quarter of 2011, said the company is in discussions with other producers to provide crude-oil transportation services through additional connections to the pipeline.

"This project provides Enterprise an opportunity to diversify our operations while taking advantage of the complementary nature among our crude oil, natural gas and natural gas liquids (NGL) businesses," said Michael Creel, Enterprise's president and chief executive.

Enterprise is the latest energy company to expand its operations in the Eagle Ford Shale, a rock formation where producers are drilling for natural gas and crude oil. Producers including Petrohawk Energy Corp. (HK) have ramped up output from the Eagle Ford Shale to capitalize on relatively high crude-oil prices, which have helped to offset slumping gas prices.

Enterprise's preliminary agreement for the Eagle Ford Shale also includes a seven-year natural gas transportation and processing agreement.