American Oil and Gas Reporter - March 2019 - 77

SpecialReport: Processing & Industry Infrastructure
The intraday day low for Feb. 4 was
negative $1.50/MMBtu. Ferguson attributes the situation primarily to maintenance
on Energy Transfer's Oasis Pipeline, a
large-diameter intrastate line that connects
Waha in West Texas to the Katy Hub in
South Texas.
"While a green-field pipeline later this
year will improve Permian gas prices for
a few months, we expect associated gas
production to grow strongly in 2020 and
continue to strain pipeline capacity again
later in the year," Ferguson says.
Relief Ahead
The next gas take-away pipeline scheduled to come into service is Kinder Morgan's Gulf Coast Express, which is designed to move 2 billion cubic feet of gas
a day from the Permian Basin to the Agua
Dulce, Tx., area and should achieve full
service in October. In late 2020, another
Kinder Morgan project, the 2.1 Bcf/d Permian Highway Pipeline, is expected to
come on line as well. It will take gas
from Waha to growing markets in Mexico
and along the Texas Gulf Coast.
Similar take-away capacity expansions
are under way for crude oil and natural
gas liquids, notes Heath Deneke, executive
vice president and chief operating officer
at Crestwood Equity Partners. "During the
second half of 2019 and the first half of
2020, constraints for both products should
be largely alleviated as crude oil and residue
pipelines come on line," he says.
Because of how long it takes to build
fractionators, Deneke says access to fractionation has been one of the biggest
constraints. "There is too little fractionation
at Mont Belvieu to handle the ramp-up
in NGL production we are experiencing
today and anticipate experiencing going
forward," he warns.
"To ensure our shippers' NGLs will
have access to fractionators, Crestwood
took out an undivided interest in the
EPIC NGL pipeline, which allows us to
move 80,000 bbl/d out of the Delaware
Basin and into the Midland area, where
we have access to multiple pipeline interconnections."
Deneke adds that Crestwood has signed
a long-term agreement with Chevron Phillips
Chemical ("CP Chem"), under which CP
Chem will buy a substantial portion of
Crestwood's Y-grade natural gas liquids
for use at its Sweeny fractionation complex.
"Between the optionality provided by the
EPIC pipeline and CP Chem's reliability
as a buyer, we will have appealing markets

for NGLs on our Delaware Basin gathering
system that will allow us to continue expanding it," he says.
According to Deneke, that system covers 214,000 acres in Eddy County, N.M.,
and Reeves, Loving and Ward counties
in Texas. "In the long run, we would like
to expand into managing crude oil and
produced water as well as natural gas,"
he says. "That has worked well in the
Bakken."

T H E

VA N Z A N D T

1st to Quote

As part of its water management efforts,
Crestwood has filed permits to build large
saltwater disposal wells. "In the Permian
Basin, four or five barrels of water must
be disposed of for every barrel of oil
produced," Deneke calculates. "Usually,
the water is sent to a shallow, low-volume
disposal well close to the production
zone. That works, but given the amount
of water that will need to be handled as
wells age and water cuts increase, it

C O M M I T M E N T

1st to Deliver

Reliable Service

Customer's Choice for:

Automated Valves, Flow Measurement
& Instrumentation

Customer's Choice for:

Automated Valves
Flow Measurement
& Instrumentation
VALVE AUTOMATION | FLOW MEASUREMENT | INSTRUMENTATION

CONTROLS, LLC
Odessa, TX | 13409 WCR 132 | 432-242-8000 | vanzandtcontrols.com
Hobbs, NM
905 North Grimes Street
575-942-2671
Tulsa, OK
8278 South Regency Drive
918-216-1058

Canyon, TX
700 Hwy 60 PO 1056
806-655-9367
Houston, TX
5115 Ashbrook Drive
713-664-2918

Deer Park, TX
4904 Railroad Street
832-821-7333
San Antonio, TX
3031 Interstate Drive
210-749-6595

MARCH 2019 77
https://vanzandtcontrols.com/
American Oil and Gas Reporter - March 2019

Table of Contents for the Digital Edition of American Oil and Gas Reporter - March 2019
