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Gas pipeline to link Permian Basin to Gulf Coast refineries

A natural gas pipeline could connect southeast New Mexico to the far east region of coastal Texas, pumping the gas more than 700 miles across the Lone Star State to go to market.

EPIC Y Grade Pipeline LP, a subsidiary of EPIC Y Grade Holdings and EPIC Midstream Holdings of San Antonio, Texas announced Monday the completion of the project’s first construction phase.

Natural gas liquid (NGL) product was first introduced to the pipeline on March 12, records show, and the second construction phase is expected to be completed and in service by June.

The final phase will complete the project during the second half of 2019, read an EPIC news release, creating a final capacity of 350,00 barrels per day.

The line will be fed by several points of origin in the Delaware and Midland basins, read the release, beginning in Orla, Texas and the Benedum Oil Field with a destination in Corpus Christi, Texas.

At the end of the pipeline, EPIC is also building a fractionation complex, where the gas is separated into individual products before being sold.

That facility will process about 100,000 barrels per day, records show.

“By providing producers with new options for takeaway and downstream players with an alternative source of feedstocks, the NGL Pipeline is the first of many projects EPIC is developing to drive growth throughout Texas and New Mexico,” read a news release.

About two hours north of Corpus Christi, EPIC also is planning to build a purity product pipeline distribution system, where the extracted gas products are dispersed, and an ethane pipeline near the town of Markham, Texas.

Construction on the NGL pipeline began in December 2017, intended to connect NGL producers in the Permian and Eagle Ford basins with chemical companies and Gulf Coast refineries, along with export markets to the east, under a definitive agreement with BP Energy Company.

A Federal Energy Regulatory Commission open season was offered in early March to offer firm capacity on the NGL pipeline to interested shippers.

Houston-based Noble Energy finalized an agreement with EPIC to bring about 75,000 barrels through the line per day.

“Bringing in a strategic partner such as Noble greatly enhances the crude and NGL projects,” said EPIC Chief Executive Officer Phillip Mezey.

“We believe EPIC offers a differentiated value proposition to producers by providing a low-cost transportation option from the Permian Basin to Gulf Coast markets that includes no risk of deficiency through acreage commitments for Permian producers.”

Aside from the NGL pipeline, EPIC is also developing a crude oil pipeline, which will run next to the NGL line for most of the route.

The crude line will provide about 590,000 barrels per day from the Permian and Eagle Ford, brought to the refining and export markets in Corpus Christi.

It was also expected be in service by the second half of 2019.

“Nearly three years in the making, the EPIC Crude Pipeline intends to upend the industry by providing upstream producers and marketers with an alternative takeaway solution to incumbent midstream providers through customer-friendly contract terms and a highly commercial business team,” read the release.

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.

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©2018 the Carlsbad Current-Argus (Carlsbad, N.M.)

Visit the Carlsbad Current-Argus (Carlsbad, N.M.) at www.currentargus.com

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