The boom of oil and gas production in the Eagle Ford Shale Play is drawing firms across the energy supply chain, from oil field operators to downstream producers, to the Coastal Bend Region.
With production in the Eagle Ford Shale play expected to surpass more than 1 million barrels of oil per day soon, firms across the energy supply chain, from oil field operators to downstream producers, are boosting their presence and investment in the area.
Stretching across south central Texas and dipping into the Coastal Bend Region, the Eagle Ford Shale formation holds some of the largest potential for oil and natural gas production in the U.S. According to the Texas Railroad Commission, production in the Eagle Ford Shale exceeded 800,000 barrels of oil per day and 3,400 million cubic feet of natural gas per day in 2013.
“The Eagle Ford is a centerpiece of our global portfolio,” says Marathon spokesperson Briana Lissy. “We anticipate drilling 340 to 355 gross company-operated wells in 2014, with approximately $2.3 billion of our 2014 capital expenditures being directed toward the Eagle Ford Shale. The Eagle Ford remains a high-value domestic resource for us.”
The record-breaking crude oil production is fueling investment and jobs not only in the oil field, but also among midstream firms developing pipelines and storage facilities at Port Corpus Christi.
Valero is upgrading its Corpus Christi refinery to process more light, sweet crude, while NuStar Energy has launched the second phase of a pipeline to carry 65,000 barrels a day of crude to the port, where it more than tripled its loading capacity. Plains All American Pipeline has also expanded its crude pipeline to accommodate growing oil volumes.
Other expansions in the works include Trafigura AG, which is adding to its pipeline and port facilities.
Infrastructure is growing to add value to the raw products coming out of the Eagle Ford Shale, including crude oil, dry natural gas and liquid gas condensate.
LyondellBasell is investing about $400 million to boost production of ethylene at its Corpus Christi site and build two fractionation units adjacent to the plant to separate byproducts of refined liquid natural gas into ethane, propane and butane to use as feedstock. The company decided to expand existing facilities in Corpus Christi and other locations rather than build new plants.
“Our significant debottleneck projects will bring new capacity into our system earlier and at substantially lower cost than constructing entirely new facilities,” says Patrick Quarles, senior vice president of Intermediates and Derivatives at LyondellBasell.
Cheniere Energy is building an $11 billion plant to liquefy natural gas for shipment across the United States and around the world, taking advantage of the close supply of natural resources and the transportation assets at Port Corpus Christi
Cheniere’s 1,000-acre site is located on the La Quinta Channel on the northeast side of Corpus Christi Bay in San Patricio County. The Corpus Christi Liquefaction Project will be constructed in three phases, with each LNG train commencing operations approximately six to nine months after the previous train.
“All these projects are happening at Corpus Christi, even though the Eagle Ford Shale is 65 miles away,” says Bill English, vice president of business development for Cheniere. “The initial value comes from drilling, but the big impact is what you do with those products, and ultimately the biggest economic impact will be these downstream operations.”
To help the region cope with the explosive growth of the energy industry, Texas A&M University-Kingsville established the Eagle Ford Center for Research, Education and Outreach. The center works with the industry to ensure sustainable development of natural resources, focusing on quality-of-life issues, such as the water supply, workforce development and affordable housing for incoming workers.
“For the Coastal Bend, there’s a lot of opportunity for us to move forward with the economic development our region needs to increase the quality of life,” says Dr. Jianhong Ren, interim associate dean. “The economics of oil and gas development will bring additional resources to help our region address issues that have been there for years.”
Read more about energy in the Coastal Bend region.