The Crosstex Energy companies and Apache Corp. (APA) are teaming up to build a natural-gas processing plant in the Permian Basin in West Texas and will jointly spend $85 million on the project.
The Crosstex companies--Crosstex Inc. (XTXI) and Crosstex Energy LP (XTEX)--will have a 50% working interest, and Apache will have the other 50%. The initial phase of the project will provide processing and other services for Apache.
Crosstex, a natural-gas producer and operator of pipelines and processing plants, will manage construction and operate the facilities. The initial project includes a refrigeration plant, expected to be in operation in the fourth quarter, and a cryogenic gas-processing plant that is expected to come on line in the second quarter of next year.
Separately, Crosstex also will spend $12 million to purchase and upgrade an abandoned fractionator, which will be refurbished to serve as a rail terminal for natural-gas-liquids shipments.
Crosstex President and Chief Executive Barry E. Davis said the deal with Apache provides the company with a footprint in the Permian Basin.
Apache in April reported that its first-quarter earnings surged 61%, handily topping analysts' estimates, as oil prices rose sharply, helping revenue jump by nearly half.
All three stocks were inactive premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com