While Enterprise Products Partners (NYSE: EPD) has one of the most diverse profiles of any midstream company in terms assets and location, the project that has been generating the most interest from producers of late is the recently announced Appalachia to Texas pipeline (ATEX Express).

This 1,230-mile project aims to solve the Marcellus and Utica shale’s ethane takeaway conundrum by transporting up to 190,000 barrels per day (b/d) of ethane from the play to the Gulf Coast.

“For Enterprise, this is a home run. It is a home run for the producers in the Marcellus and Utica, and it’s a home run for the Gulf Coast petrochemical industry,” Jim Teague, executive vice president and COO of Enterprise, said during the company’s recent conference call to discuss Q4 2011 earnings.

“It adds significant value to both Marcellus and Utica [shale] producers and to the Gulf Coast petrochemical [industry], as these volumes are key to both realizing their growth potential. The project integrates Marcellus/Utica volumes into our NGL infrastructure at Mont Belvieu and all along the Gulf Coast,” he added.

Prior to the announcement of this project, there had been worries over costs and completion time. However, Teague said that the project is able to be cost and timing competitive since it will use significant amounts of existing pipeline. This also has the added benefit of increasing the value of existing assets for the company.

Countering claims by some analysts that the ethane market risks being oversupplied in the coming years, Teague stated that Enterprise’s internal model shows that ethane will likely remain balanced even after this project comes into service.

“In a market this big, there are always variables on both the supply and demand side of the equation, each with numerous possibilities and timelines. These include things such as how quickly the reserves can be developed and brought online, how quickly petrochemicals can do their conversions and builds. Turnarounds play a part, and then how quickly new pipe will be built. I can tell you they won’t be full on day one and they are not contracted this way,” he said.

Teague said that the company doesn’t envision Marcellus/Utica propane production to exceed local demand for the next five to seven years, but after that time the company could utilize a similar approach to solving the potential propane takeaway issue as it did with the ethane takeaway issue.

Eagle Ford Continues To Beat Expectations

“The Eagle Ford continues to beat everyone’s expectations, and frankly our assets can’t get up and running soon enough. Our pipes, plants and fractionators in the Eagle Ford are chock-a-block full,” Teague said.

The company anticipates bringing the first train on its new 600 million cubic feet per day (MMcf/d) Yoakum processing plant in the play into service in early May with the second train coming online in Q1 2013. He added that this first train will be full on day one because of the amount of drilling rigs focused on the play.

Enterprise remains on schedule for its two-phase Eagle Ford crude oil pipeline, which will run 215 miles through the heart of the play. The system will have an initial transportation capacity of 350,000 b/d and connect to the company’s new ECHO terminal near Houston. This facility will have a storage capacity for approximately 5 million barrels of crude.

Although the company has already been successful in the Eagle Ford, Teague said that it is far from through from finished. Its acquisition of the Seaway Pipeline, which is in the midst of a reversal and expansion project, is going so well that the company anticipates looping the system and increasing capacity up to 1 million b/d if there is enough demand.

“One of the things that differentiates Seaway is in combination with our partner, Enbridge, we can access supplies from Alberta, the Bakken and Cushing, and then deliver these volumes to every refinery in Houston, Beaumont and Port Arthur,” he said.

Contact the author, Frank Nieto, at fnieto@hartenergy.com.