Meritage Midstream Services LLC is planning to build a new rich gas gathering system in Webb County, TX. Escondido Resources II LLC will serve as the system’s anchor tenant and will have firm capacity on Meritage’s existing Eagle Ford Escondido Gathering System to move its Eagle Ford volumes.
Escondido Resources will dedicate approximately 33,000 acres to Meritage including deep and shallow rights in the Eagle Ford, Escondido and Olmos formations.
Known as the Cuervo Creek Pipeline, Meritage’s rich gas gathering system will cover more than 1,300 square miles from Encinal south to Laredo. The 60-mile system will include multiple downstream interconnects. The 16-inch Cuervo Creek Pipeline will have an initial capacity of 150 MMcf/d and is expected to be in service in the fourth quarter of 2011. Meritage expects to increase its rich gas gathering capacity in 2012 to accommodate the quickly developing shallow gas play.