Crosstex Energy Announces Long-Term Supply Commitments for Cajun-Sibon Natural Gas Liquids Extension Project

abarrelfull wrote on 08 Feb 2012 14:37
Tags: crosstex pipeline usa

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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.

• Crosstex Energy Announces Long-Term Supply Commitments for Cajun-Sibon Natural Gas Liquids Extension Project

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