Chevron announces gas production plan

Chevron U.S.A. Inc. said Wednesday it has entered into a long-term agreement with Enterprise Gas Processing LLC to gather and treat natural gas and extract natural gas liquids from hydrocarbons produced from its Piceance Basin operations in western Colorado.

Enterprise Gas Processing, an affiliate of Enterprise Products Partners L.P., which is traded on the New York Stock Exchange, has agreed to process all natural gas Chevron produces from the Piceance program at its newly commissioned Meeker natural gas processing facility, located 26 miles north of Chevron’s development.

The Meeker facility has current processing capacity of 750 million cubic feet per day of natural gas. That is expected to double to 1.5 billion cubic feet per day with the scheduled completion of a Phase II complex in the third quarter of 2008. Initial volumes from Chevron’s Piceance production are estimated to be 50 million cubic feet per day beginning in 2008.

Chevron began its drilling program in the Piceance Basin with 13 test wells in 2005 on 33,000 acres that it owns on Colorado’s Western Slope. Two specifically built rigs began drilling the first development wells this summer, using extended-reach directional drilling techniques that will allow Chevron to complete up to 22 wells from a single pad.

The entire development program may involve more than 2,000 wells and could last from 10 to 15 years, with production operations continuing for several decades, the company says.