Crosstex Energy Announces Natural Gas Liquids Pipeline, Fractionation Expansion Project in Louisiana

abarrelfull wrote on 12 Dec 2012 07:31
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Jul 25, 2011

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 is completing engineering studies, pipeline routing work and environmental permitting for a natural gas liquids (NGL) project that will expand Crosstex's Louisiana fractionation facilities and expand access to these facilities and Louisiana product markets through a new NGL pipeline. The new pipeline will be an extension of the Partnership's 440-mile Cajun-Sibon NGL pipeline that is connected to the Partnership's Eunice NGL fractionation facilities in south central Louisiana. The new 130-mile, 12-inch-diameter NGL pipeline extension will connect the Eunice fractionation facilities to Mont Belvieu supply pipelines and will have an initial capacity of 70,000 barrels per day of raw-make NGLs. The project also includes the expansion of the Partnership's Eunice NGL fractionation facilities from 15,000 barrels to 55,000 barrels of NGL per day, which will increase the Partnership's interconnected fractionation capacity in Louisiana to approximately 97,000 barrels per day of NGLs. The Partnership's investment for the project is currently estimated at $180 million to $220 million.

The Partnership has entered into a long-term ethane sales agreement with Williams Olefins, LLC, a subsidiary of the Williams Companies (NYSE:WMB), providing a secure market for the key product in the project. The ethane will flow into Williams' ethane pipeline system in Louisiana. In addition, the Partnership has its own supply from its Texas gas plants and commitments for supply from a select group of NGL suppliers. The Partnership is negotiating additional long-term commitments for the new system expansion, which will provide producers and other midstream companies with an attractive alternative market for their NGL production at Mont Belvieu pricing.

"This is an exciting opportunity for Crosstex and gives us a tremendous growth platform as we expand our integrated NGL system and optimize our assets," said Barry E. Davis, Crosstex President and Chief Executive Officer. "There is increasing demand for fractionation and NGL handling as producers pursue the development of liquids-rich natural gas shale plays. We will be able to offer our midstream and producer customers an integrated NGL transportation, fractionation and marketing alternative to Mont Belvieu. We will also improve the reliability and diversity of NGL supply to the Louisiana petrochemical and refinery markets, which have been negatively impacted by declining supply from the Gulf Coast."

The new NGL pipeline extension will originate from interconnections with major Mont Belvieu supply pipelines, providing connections for NGLs from the Permian Basin, Midcontinent, Barnett Shale, Eagle Ford Shale and Rocky Mountain areas to the Partnership's NGL fractionation facilities in South Louisiana. In addition to an attractive ethane market, the Partnership's facilities in South Louisiana provide access to markets for the remaining components of the NGL barrel.

Construction of the new NGL pipeline extension is expected to begin in the second quarter of 2012, and the facilities are expected to be operational in the first quarter of 2013.

• Crosstex Energy Announces Natural Gas Liquids Pipeline, Fractionation Expansion Project in Louisiana

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