Crosstex Energy Announces Long-Term Supply Commitments for Cajun-Sibon Natural Gas Liquids Extension Project
February 08 2012 - 6:30AM
Business Wire
The Crosstex Energy companies, Crosstex Energy, L.P.
(NASDAQ:XTEX) (the Partnership) and Crosstex Energy, Inc.
(NASDAQ:XTXI) (the Corporation), today announced that the
Partnership has received sufficient long-term supply commitments to
proceed with the construction of its Cajun-Sibon extension, a
130-mile, 12-inch-diameter natural gas liquids (NGL) pipeline. The
pipeline will extend the Partnership’s existing 440-mile
Cajun-Sibon NGL system and connect Crosstex’s NGL fractionation
facilities in south central Louisiana to Mont Belvieu supply
pipelines in East Texas. The extension allows the Partnership to
provide producers and midstream companies an attractive alternative
market for their NGL production at Mont Belvieu pricing. The
Partnership is currently negotiating additional long-term
agreements for the remaining capacity and expects the new pipeline
will begin operations at or near its initial capacity of 70,000
barrels of NGL per day.
The Partnership will begin construction in the third quarter of
2012 as scheduled. Due to strong supplier interest, the pipeline
project has been expanded since it was announced in July 2011 and
now includes an additional supply connection. The total capital
investment is now estimated at $230 million. The new pipeline and
facilities are expected to be operational in the first half of
2013.
As previously announced, the Partnership has entered into a
long-term ethane sales agreement with Williams Olefins, LLC, a
subsidiary of the Williams Companies, which provides a secure
market for the key product in the project. The Partnership’s
facilities in South Louisiana provide an attractive ethane market,
as well as market access for the remaining components of the NGL
barrel.
“We are pleased with the strong interest in this project,” said
Barry E. Davis, Crosstex President and Chief Executive Officer.
“The willingness of midstream and producer customers to make
long-term commitments reflects increasing demand for fractionation
and NGL handling as producers continue to pursue liquids-rich
natural gas plays. We will be able to offer our customers an
integrated NGL transportation, fractionation and marketing
alternative to Mont Belvieu.”
Project Provides Economic Benefits in Louisiana and
Texas
The Cajun-Sibon pipeline extension and expansion of the Eunice
fractionation facilities will provide substantial economic benefits
in Louisiana and Texas according to the economic impact study
prepared by Dr. James A. Richardson. In Louisiana, it is estimated
that the Cajun-Sibon project will produce additional business
activity of $206.9 million and 1,351 net new jobs during the
construction period. In Texas, the construction project will lead
to average additional business activity of $131.9 million and 1,014
net new jobs.
The completed study can be found at www.crosstexenergy.com.
About the Crosstex Energy Companies
Crosstex Energy, L.P., a midstream natural gas company
headquartered in Dallas, operates approximately 3,300 miles of
pipeline, nine processing plants and three fractionators. The
Partnership currently provides services for 3.2 billion cubic feet
of natural gas per day, or approximately six percent of marketed
U.S. daily production.
Crosstex Energy, Inc. owns the two percent general partner
interest, a 25 percent limited partner interest and the incentive
distribution rights of Crosstex Energy, L.P.
Additional information about the Crosstex companies can be found
at www.crosstexenergy.com.
This press release contains forward-looking statements within
the meaning of the federal securities laws. These statements are
based on certain assumptions made by the Partnership and the
Corporation based upon management's experience and perception of
historical trends, current conditions, expected future developments
and other factors the Partnership and the Corporation believe are
appropriate in the circumstances. These statements include, but are
not limited to, statements with respect to forecasts regarding
capacity, cash flow, incremental investment and timing for becoming
operational for the projects discussed above, as well as the
Partnership's future growth and results of operations. Such
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the
Partnership and the Corporation, which may cause the Partnership's
and the Corporation's actual results to differ materially from
those implied or expressed by the forward-looking statements. These
risks include, but are not limited to, risks discussed in the
Partnership's and the Corporation's filings with the Securities and
Exchange Commission. The Partnership and the Corporation have no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
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