EnLink Midstream Partners, LP (NYSE:ENLK) and EnLink Midstream, LLC (NYSE:ENLC), today announced plans to construct a new 45-mile, eight inch condensate pipeline and six natural gas compression and condensate stabilization facilities that will service major producer customers in the Utica Shale, including Eclipse Resources. The total investment for the expansion project is over $250 million, roughly doubling the capital EnLink Midstream has invested in the Ohio River Valley to more than $500 million.
“This new expansion project is a major step forward for EnLink, as it enables us to build upon our existing asset platform and take advantage of the tremendous growth opportunities in the Utica Shale,” said Barry E. Davis, EnLink Midstream’s President and Chief Executive Officer.
“This project is a game changer for our Ohio River Valley business and positions us in the heart of the gas and condensate production fairway. By further enhancing our midstream capabilities, we will provide multiple take-away options for stabilized condensate via our pipeline system, rail terminal and barge facility. We believe these service offerings, in addition to our extensive truck fleet and the expansion of our gas compression and condensate stabilization facilities, will create significant value for our customers by providing them access to premium priced markets.”
As a component of the project, EnLink Midstream Partners has entered into a long-term, fee-based agreement with Eclipse Resources for compression and stabilization services and for the purchase of stabilized condensate. Eclipse Resources is a leading Utica Shale focused exploration and production company that is currently running four horizontal rigs in the Utica Shale and expects to add an additional two rigs by year end.
The new-build stabilized condensate pipeline will connect to EnLink Midstream Partners’s existing 200-mile pipeline in eastern Ohio and West Virginia, providing producer customers in the region access to premium market outlets through the company’s Bells Run barge facility and Black Run rail terminal. The pipeline, which is expected to be complete in the second half of 2015, will have an initial capacity of approximately 50,000 barrels per day (bpd) and is expandable based on customer interest. The company expects to hold an open season for the pipeline in the Fall of 2014.
EnLink Midstream Partners will also build and operate six natural gas compression and condensate stabilization facilities in Noble, Belmont, and Guernsey counties. Upon completion, the facilities will have a combined capacity of approximately 560 million cubic feet per day (MMcf/d) of natural gas compression and approximately 41,500 bpd of condensate stabilization. The company expects the first two compression and condensate stabilization facilities to be operational in the second half of 2014 and the remaining four facilities to be operational by the end of 2015.
In support of the project, EnLink Midstream Partners will leverage and expand its existing midstream assets in the region, including increasing condensate storage capacity and handling capabilities at its Bells Run barge terminal on the Ohio River. The company will add approximately 120,000 barrels of above ground storage, bringing its total storage capacity at the barge facility to over 360,000 barrels. Additionally, it will increase the flexibility of its existing and new assets to handle and ship multiple grades of crude oil and stabilized condensate. The Bells Run barge terminal provides access to leading crude and condensate markets in the Utica Region and these enhancements will enable further growth in the near and long term.
EnLink Midstream Partners will also utilize its Black Run rail terminal to export growing volumes of crude oil and stabilized condensate. The rail facility offers customers in the Utica Shale an existing solution to export multiple products, including light oil condensate and various grades of crude oil, at a rate of 24,000 bpd.
The new condensate pipeline and gathering system, as well as the natural gas compression and condensate stabilization facilities, including the two stabilization facilities announced recently for Antero Resources, represent a major expansion of EnLink Midstream’s assets in the Utica Shale. Following completion of these projects, EnLink Midstream Partners will own and operate over 250 miles of pipeline, 11 natural gas compression and condensate stabilization facilities with a total capacity of approximately 1.2 billion cubic feet per day and 60,000 bpd, respectively, a fleet of over 110 trucks, and eight brine disposal wells.
A detailed map of the expansion project can be found on EnLink Midstream’s website at www.enlink.com.
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