Crosstex Energy Completes $115 Million North Texas Pipeline
April 05 2006 - 8:04AM
PR Newswire (US)
New Pipeline Services Growing Barnett Shale Natural Gas Play
DALLAS, April 5 /PRNewswire-FirstCall/ -- Crosstex Energy, L.P.
(NASDAQ:XTEX) (the Partnership) announced the completion of
construction on the 24-inch diameter North Texas Pipeline (NTPL)
facilities, covering more than 140 miles across six North Texas
counties that will gather and transport gas out of the prolific
Barnett Shale. The Barnett Shale is the largest active natural gas
play in the continental United States. Crosstex invested
approximately $115 million in the pipeline project, which allows
for delivery to major distributors like Coserv Energy and Atmos
Energy for sale to local consumer and business markets in the North
Texas area. Delivery points are also being constructed to Natural
Gas Pipeline Co. of America and Houston Pipe Line Co., which serve
other markets in Texas as well as throughout the U.S. A portion of
the NTPL was put into service in early February 2006 and the
remaining portion of the system began flowing on April 4, 2006.
Initially, the line has the capacity to deliver 250 million cubic
feet per day. With added compression, this capacity could increase
to 375 million cubic feet per day. Currently, natural gas
production from the Barnett Shale averages 1.4 billion cubic feet
per day with predicted growth of up to three billion cubic feet per
day during the next three to five years. "The continued growth in
production of the Barnett Shale constitutes tremendous opportunity,
and we wanted to be a major player in this growth. Our $115 million
investment to build the North Texas Pipeline not only provides our
company with an excellent organic growth opportunity, but it also
provides the necessary transportation of Barnett Shale production
to key markets," said Barry E. Davis, president and chief executive
officer. "Without the new pipeline, producers and royalty owners
would not be able to efficiently get their product to market." In
the fall of 2004, producers were looking at creating new options
for transporting their gas to an improved marketplace due to the
growing volumes of gas production in the Barnett Shale. A new
pipeline connecting the production area to additional local
intrastate markets and the interstate pipeline grid was determined
to be the best alternative to get the gas to consumers. Existing
carriers offered limited capacity for some production areas and
none to other areas. Rights-of-way across Tarrant, Denton, Collin,
Fannin, Delta, and Lamar counties were purchased by Crosstex Energy
starting in early 2005, and construction commenced in October 2005.
Over 400 workers in two construction spreads worked to complete
this large undertaking on an extremely aggressive schedule, with a
target flow of first quarter 2006. "We have found that the 'if you
build it, they will come' message holds true in the midstream
market," said Davis. "Crosstex actively sought anchor producers
willing to commit to the pipeline system, and then endeavored to
aggregate additional throughput while designing, permitting, and
building the system. This strategy has proven to be beneficial for
Crosstex and our customers." As drilling activity spread into
Parker County, Crosstex also completed construction on the 35
million cubic feet per day Goforth Processing Plant and
accompanying natural gas liquids pipeline in southern Parker
County. Crosstex is also designing another processing plant near
Azle, where gas will be gathered, processed and then delivered to
the North Texas Pipeline via a new 30-mile 16-inch pipeline. An
additional natural gas liquids pipeline from the Azle plant will
connect to the Goforth plant for sale of plant products. Economic
benefits as a result of the new pipeline and processing plants
reach beyond the energy industry. In addition to increased local
employment and retail sales, the new pipeline will be a significant
generator of tax revenue for local governments and schools. "The
entire Crosstex group that worked on this project was very
professional. They answered all of my questions and always let me
know what was going on," said Richard Mayes, landowner and former
Texas State Senior District Judge. "When laying the pipeline in the
right of way, Crosstex sought to be as unobtrusive as possible.
They were very good about working with me about where to locate the
pipeline so the impact to my land was very minimal." About the
Crosstex Energy Companies Crosstex Energy, L.P., a mid-stream
natural gas company headquartered in Dallas, operates over 5,000
miles of pipeline, nine processing plants, four fractionators, and
approximately 150 natural gas amine treating plants and 22 dew
point control plants. Crosstex currently provides services for over
3.0 Bcf/day of natural gas, or approximately 6.0 percent of
marketed U.S. daily production based on August 2005 Department of
Energy data. Crosstex Energy, Inc. owns the two percent general
partner interest, a 38 percent limited partner interest, and the
incentive distribution rights of Crosstex Energy, L.P. Additional
information about the Crosstex companies can be found at
http://www.crosstexenergy.com/. DATASOURCE: Crosstex Energy, L.P.
CONTACT: Jill McMillan of Crosstex Energy, L.P., +1-214-721-9271,
or Web site: http://www.crosstexenergy.com/
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