CenterPoint to expand gathering, treating in Haynesville
Warren R. True
OGJ Chief Technology Editor—LNG/Gas Processing
HOUSTON, May 3--CenterPoint Energy Field Services Inc., Houston, will add more gathering and treating for Haynesville shale gas production being developed by subsidiaries of Encana and Shell.
The 250-MMcfd expansion on the company’s Magnolia system, announced last week, along with 750 MMcfd announced in September 2009 and currently under construction, will add 1 bcfd covered under long-term agreements executed in September 2009 between CenterPoint Field Services and those subsidiaries.
The agreements are with Encana Oil & Gas (USA) Inc., an indirect, wholly-owned subsidiary of Encana Corp., and SWEPI LP, an indirect wholly-owned subsidiary of Royal Dutch Shell PLC.
CenterPoint Field Services’ announcement cited 200 MMcfd and its 2009 announcement 700 MMcfd. Responding to questions from OGJ, however, CenterPoint Field Services’ Kerri Selsor, vice-president of engineering and construction, revised those target volumes to actual volumes of 250 MMcfd and 750 MMcfd.
Fivefold increase
The company’s total gathering and treating for DeSota and Red River parishes will reach 1.2 bcfd when all expansions are in service by mid-2011.
CenterPoint estimates the cost for the 250 MMcfd expansion will be $50-$70 million and includes 1,000 gpm of amine treating at the company’s Magnolia plant, an additional 5 miles looping, and about 8,000 hp at its Hall Summit compressor station, all on the east side of the Red River.
As part of expansion announced in September 2009, CenterPoint Field Services is installing about 25 miles of pipe east of the Red River and another 30 miles on the west side, also in Red River Parish.
The work is also installing about 3,000 gpm of additional amine treating for the 750 MMcfd incremental volumes: 2,000 gpm at the Magnolia plant east of the river and 1,000 gpm at CenterPoint Field Services Clear Lake plant west of the river. All the work is in Red River parish.
And the project announced last year is installing about 30,000 hp of additional compression, 20,000 hp at the Hall Summit station east of the river, and 10,000 hp at the Clear Lake plant on the west side.
CenterPoint’s latest announcement said construction of the 750 MMcfd is running ahead of schedule with “substantial volumes flowing” and will be in service be yearend.
CenterPoint Field Services is an indirect, wholly-owned gathering and treating unit of CenterPoint Energy Inc., Houston. It gathers and processes about 1.6 bcfd and holds more than 400 MMcfd of processing capacity throughout its gathering system, directly or through its 50% interest joint venture with Martin Midstream Partners LP, Kilgore, Tex., in the Waskom Gas Processing Co.
It owns and operates about 3,800 miles of gathering pipelines and processing plants that collect, treat, and process natural gas from about 150 separate systems in major producing fields in Arkansas, Louisiana, Oklahoma, and Texas.
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OGJ Chief Technology Editor—LNG/Gas Processing
HOUSTON, May 3--CenterPoint Energy Field Services Inc., Houston, will add more gathering and treating for Haynesville shale gas production being developed by subsidiaries of Encana and Shell.
The 250-MMcfd expansion on the company’s Magnolia system, announced last week, along with 750 MMcfd announced in September 2009 and currently under construction, will add 1 bcfd covered under long-term agreements executed in September 2009 between CenterPoint Field Services and those subsidiaries.
The agreements are with Encana Oil & Gas (USA) Inc., an indirect, wholly-owned subsidiary of Encana Corp., and SWEPI LP, an indirect wholly-owned subsidiary of Royal Dutch Shell PLC.
CenterPoint Field Services’ announcement cited 200 MMcfd and its 2009 announcement 700 MMcfd. Responding to questions from OGJ, however, CenterPoint Field Services’ Kerri Selsor, vice-president of engineering and construction, revised those target volumes to actual volumes of 250 MMcfd and 750 MMcfd.
Fivefold increase
The company’s total gathering and treating for DeSota and Red River parishes will reach 1.2 bcfd when all expansions are in service by mid-2011.
CenterPoint estimates the cost for the 250 MMcfd expansion will be $50-$70 million and includes 1,000 gpm of amine treating at the company’s Magnolia plant, an additional 5 miles looping, and about 8,000 hp at its Hall Summit compressor station, all on the east side of the Red River.
As part of expansion announced in September 2009, CenterPoint Field Services is installing about 25 miles of pipe east of the Red River and another 30 miles on the west side, also in Red River Parish.
The work is also installing about 3,000 gpm of additional amine treating for the 750 MMcfd incremental volumes: 2,000 gpm at the Magnolia plant east of the river and 1,000 gpm at CenterPoint Field Services Clear Lake plant west of the river. All the work is in Red River parish.
And the project announced last year is installing about 30,000 hp of additional compression, 20,000 hp at the Hall Summit station east of the river, and 10,000 hp at the Clear Lake plant on the west side.
CenterPoint’s latest announcement said construction of the 750 MMcfd is running ahead of schedule with “substantial volumes flowing” and will be in service be yearend.
CenterPoint Field Services is an indirect, wholly-owned gathering and treating unit of CenterPoint Energy Inc., Houston. It gathers and processes about 1.6 bcfd and holds more than 400 MMcfd of processing capacity throughout its gathering system, directly or through its 50% interest joint venture with Martin Midstream Partners LP, Kilgore, Tex., in the Waskom Gas Processing Co.
It owns and operates about 3,800 miles of gathering pipelines and processing plants that collect, treat, and process natural gas from about 150 separate systems in major producing fields in Arkansas, Louisiana, Oklahoma, and Texas.
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Tags: CenterPoint, Haynesville, expand, gathering, in, to, treating
Views: 559
Replies to This Discussion
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Permalink Reply by Buddy on
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Baron: Is it safe to assume that the price at the well head will be less than after "treatment"...
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Permalink Reply by Jack Blake on
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Jack Blake has been involved in offshore oil and gas operations all his adult life and understands about oil companies, gas P/L companies and the contracts they do. Jack works for a major oil company and we have a department called "gas control" who do "nominations" to the pipeline companies we sell gas to. For example gas control says we'll sell Trunkline 1,500,000,000 during the upcoming month of June 2010. His nomination is based on what the wells have been producing historically, what new wells we have coming on, any shut in plans we have, etc.. If we sell them less than the nomination we are penalized. If we sell them more than the nomination we get paid less for the overage. Jack is gonna have to start asking our gas control folks what we are currently getting paid per mcf/d.
When the platforms Jack is responsible for have unplanned downtime, or we bring on new production I have to let gas control know so they can adjust nominations.
About 35 years ago the major oil company Jack works for did a long term gas contract for 27 cents per mcf/d. Whan the contract ended in about 1987 our company rejoiced and has not done any new long term gas contracts that I know of for our Gulf of Mexico gas production.
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Ouch at the $.27 - I bet when that contract expired it was similar to getting rid of a kidney stone the size of a Buick.
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Permalink Reply by Les Bamburg on -
Jack, just to clarify - Trunkline is only transporting the natural gas and does not actually purchase the gas. The actual gas purchaser could be a utility, power plant or gas marketer. They are likely buying the gas at the point of delivery into Trunkline and would hold the firm transportation capacity on the pipeline. Alternatively if your company holds the Trunkline capacity to the end market area (ie Chicago), your company could sell the gas to a purchaser in the market area.
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Permalink Reply by Les Bamburg on
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Jack, your royalty will be based on the sales price received by Chesapeake who will likely market their share of any gas produced.
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Permalink Reply by Les Bamburg on
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Baron, it is unlikely Centerpoint will be involved in the marketing of the gas. CFS would just be providing the gathering, treating and transportion to one or more of the large downstream interstate gas pipelines. Both EnCana and Shell have firm transportation capacity on the downstream pipelines and would most probably do their own gas marketing.
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Permalink Reply by Jack Blake on
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Ok I'm learning some things here..........
Shell is drilling the well in my section, but I leased to CHK. Will CHK or Shell sell "my" share of the gas and pay me royalties. I think you just answered this Less, but Jack has a thick skull and wants to ensure he understands things correctly.
Less,
If CHK markets my share of the gas, but Shell and Encana hold all the P/L capacity from CenterPoint for the P/L infrastructues and gathering line from the well, how can CHK market their share of the gas?
Either way, Jack Blake thinks he will not have to pay transportation costs to CenterPoint, because his lease says he'll be paid, "the higher of market price or gross proceeds at the wellhead"........
hhhmmmmmmmmmmmmm pondered Jack Blake
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Permalink Reply by Les Bamburg on
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Jack, Chesapeake has the rights to sell your share but under the terms of the Unit Operating Agreement (or other contract) may have Shell market all the gas produced from the unit.
I did not mean to imply Shell & EnCana have all the capacity on the new CFS gathering lines. Centerpoint Field Services probably has the right to treat and transport other parties' gas to the downstream pipelines. So Chesapeake would simply contract with CFS for those services. Chesapeake also holds firm capacity on one or more of the downstream pipelines.
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Permalink Reply by Jack Blake on
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Les B,
Now Jack is beginning to see the light.
Jack thinks Encana and Shell probably have a stake in CFS and will get sweeter deals from CFS on that gathering system unless CHK has a piece of it also(based on what jack has seen with the majoroil co. he works for).............
Can you answer tyhis question or do you know who can?
Based on current $4.00/mcf gas price, what do you think Jack's well will sell gas for at the wellhead per mcf at the wellhead?
GHS howled Jack Blake!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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Permalink Reply by Les Bamburg on
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Jack,
For a $4.00/MMBtu Henry Hub FOM (1st of the month) cash price, I will say $3.50-3.70/Mcf wellhead. It is hard to say and as royalty owners get more checks they will get a better feel for the netback.
By the way, only look at the NYMEX futures close price as the indicator for a month as the NYMEX daily quotes do not really have much bearing on the monthly price.
EnCana & Shell do not have an ownership in CFS but rather just long term service contracts. -
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Permalink Reply by Steve W on
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If I understand the article and what is written between the lines, Encana will separate, measure and dehydrate at the wellhead, and Centerpoint will transport sour gas cross country to the process plants. All the 24" gathering lines being installed will be sour gas.
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