Regency Energy expands NGL system in Eagle Ford Shale
NEW YORK (Reuters) - Regency Energy Partners (RGP.N) said on Monday it was expanding its Edwards Lime Gathering Joint Venture in the Eagle Ford shale that will increase the amount of natural gas liquids it can transport to help meet the growing demand of the chemical industry.
Regency, which owns 60 percent of the Edwards Lime system and operates the assets on behalf of Statoil Pipelines and Talisman Energy, said it will increase the system's capacity by 90 million cubic feet per day to 160 mmcfd by the fourth quarter of 2012.
The line will also carry an additional 17,000 barrels per day of crude out the liquids-rich hydrocarbon play. Regency has a storage facility at Mont Belvieu, Texas, the largest natural gas liquids hub in North America.
Interest in natural gas liquids are booming due to the growing appetite of the Gulf Coast petrochemical industry. Several industry players are expanding capacity of both pipelines and fractionators to feed the growing appetite of the chemical industry.
Enterprise Products Partners said it would build two new natural gas liquid fractionators at Gulf Coast Mont Belvieu, Texas, terminal.
Phillips 66, newly spun off downstream arm of ConocoPhillips, is also looking to supplying the chemical industry. After reporting record first-quarter chemical segment earnings on strong demand and profit margins for chemicals like ethylene, it said it would expand its fractionation capacity at its Sweeny, Texas, facility.
Regency said contracts for the expansion are fee based, which includes reservation fees. Total capital spending on the project will be about $150 million with Regency responsible for $90 million.
Shares of Regency Energy Partners, a master limited partnership based in Dallas, were up 9 cents at $22.87 in morning trading.
(Reporting By Janet McGurty; Editing by Maureen Bavdek)
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