The arrangement provides for Plains All American (PAA) and Enterprise Products Partners(EPD) to consolidate certain portions of previously announced pipeline projects servicing the Eagle Ford shale play in South Texas. The joint venture system is supported by long-term commitments totalling 210,000 bbl/d. The consolidation will provide shippers with increased market flexibility and enable PAA and EPD to optimise their capital investments.
The joint venture will include an approximately 225 km crude oil and condensate line extending from Gardendale in LaSalle County to Three Rivers in Live Oak County and continuing on to Corpus Christi, and a new 56 km pipeline segment from Three Rivers to Enterprise's Lyssy station in Wilson County. The system, which is currently under construction, will have a targeted capacity of 350,000 bbl/d and will include a marine terminal facility at Corpus Christi and 1.8 million barrels of operational storage capacity across the system.
At Lyssy, the joint venture pipeline will interconnect with EPD's existing South Texas Crude Oil Pipeline that transports crude oil to Sealy, Texas for ultimate delivery into the Houston-area refinery market. Portions of the system are expected to be placed in service in the fourth quarter of 2012, with the balance of the system expected to be placed into service in the first half of 2013. The joint venture system will be an intrastate common carrier pipeline with a posted initial base tariff rate of $US1.25 per barrel from Gardendale to all destinations.
PAA will serve as the operator of the joint venture system, which will not include PAA's Gardendale Gathering System or EPD's South Texas Crude Oil Pipeline.
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President and Chief Operating Officer of Plains All American Pipeline Harry Pefanis said "We are very pleased to work with Enterprise to optimise our respective construction activities in South Texas. This joint venture provides necessary take-away capacity for the growing Eagle Ford region, while reducing capital costs and enhancing returns for both parties.
“The combined project will provide shippers with the option to deliver to Three Rivers, Corpus Christi, Houston, and with dock capabilities at Corpus Christi to access other gulf-coast markets."
Executive Vice President and Chief Operating Officer for Enterprise's general partner A.J. "Jim" Teague said "Combining these two projects is a more efficient use of our capital and it expands market access for our shippers."
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