Eagle Ford Shale Primes Investment Pipeline for Coastal Texas Region
voestalpine AG’s new plant at Port Corpus Christi will create more than 150 new jobs for the Coastal Bend, TX area.
The liquified natural gas gold rush is on in the Coastal Bend of Texas. A who's who of oil and gas industry players are seeking to capitalize on the rich natural gas reserves in region's Eagle Ford Shale play by pouring money into every point along the profit potential pipeline "“ upstream, midstream and downstream.
"Eagle Ford is a world-class shale play," says Andrew Ware, spokesperson for Cheniere Energy. "Production of oil, natural gas and natural gas liquids such as ethane and propane are all rising at a rapid pace. Development is further helped by existing hydrocarbon infrastructure in place along the Texas Gulf Coast, including refineries, processing, petrochemicals and terminaling infrastructure."
World-Class Export Terminals
Cheniere Energy's proposed Corpus Christi Liquefaction Project, planned for the La Quinta Channel on the northeast side of Corpus Christi Bay, would consist of three LNG trains capable of liquefying up to 1.8 billion cubic feet per day of LNG for export, plus an associated 24-mile pipeline through San Patricio County. The company's goal is to expand market outlets for growing supplies of natural gas from unconventional formations in Texas such as the Eagle Ford Shale, as well as historically prolific conventional formations in other areas throughout the state.
To help move Eagle Ford products to its customers, NuStar Energy is investing $100 million to $120 million to construct a new dock in Corpus Christi. Recently, the energy firm also acquired a 38-mile natural gas pipeline from Pettus to Refugio.
Champing at the Bit
Estimates from a 2012 study on potential reserves in the Eagle Ford Shale formation that promise a decade of longevity have inspired industry leaders to increase their drilling. Chesapeake Energy Resources, which has committed 35 percent of its 2013 $6 billion capital budget to the play, is seeking to almost double its production to 92,000 barrels of oil equivalent per day by the end of 2013.
On the refining side, Flint Hills Resources hopes to invest $250 million to retrofit its West Refinery to process more Eagle Ford crude oil and reduce air emissions. The proposed retrofit is still in the permitting process, says Flint Hills Resources spokesperson Katie Stavinoha. In 2012, the company had 1,200 employees in the Coastal Bend Region, and Koch Pipeline Company, which operates its pipelines, employed an additional 11,000, resulting in $563 million in total compensation and benefits.
Midstream and Mainstream
Eagle Ford Shale's growth potential is also spurring investment by midstream companies and manufacturers. Oil field services firm Baker Hughes is constructing an Eagle Ford operations center along the Highway 44 corridor near the Corpus Christi International Airport, while oil and gas logistics provider Martin Midstream is working on a proposed expansion of its 250-acre Harbor Island site. EOG Resources opened a new facility in Refugio that processes and distributes fracturing sand used in drilling operations.
Coastal Bend's rich resources are also attracting the attention of foreign firms. Austria's largest steelmaker, voestalpine AG, is investing $700 million to build a natural gas-fired iron ore plant at Port Corpus Christi. Italy-based M&G Group is spending $1 billion to build two plastics manufacturing plants along the bay. And TPCO America, a subsidiary of Chinese manufacturer Tianjin Pipe Co., is nearing completion of a $1 billion pipe mill in Gregory.
From the perspective of companies like Cheniere Energy, the Coastal Bend Region is an ideal nexus to leverage profit derived from natural energy resources in the Eagle Ford Shale as well as around the state.
"The integrated nature of the Texas market – owing to a well-developed intrastate pipeline system – means that these multiple natural gas sources would be accessible to our planned export facility in Corpus Christi," Ware says.