Source: Crosstex Energy
Crosstex Energy, L.P. (NASDAQ: XTEX) and Crosstex Energy, Inc. (NASDAQ: XTXI) has completed two expansion projects on its natural gas gathering system in the Barnett Shale play in North Texas that will make a major contribution to gathered volumes.
The Partnership expanded its natural gas gathering system in North Texas with the construction of a $25 million, 15-mile pipeline extension to serve major Barnett Shale producers. The project, which is supported by volumetric commitments, includes a seven-mile low-pressure pipeline, an eight-mile high-pressure pipeline and a compressor station in southwest Tarrant County that provides customers with greater takeaway capacity to accommodate their transportation requirements.
The peak flow rate of the new gathering system in 2012 is anticipated to be more than 100 million cubic feet (MMcf) of processable gas per day. The pipeline extension’s throughput during the first four years of operation is expected to be approximately 100 billion cubic feet. Annual average cash flow for the new extension is estimated to be $10 million.
The Partnership also entered into a 10-year firm gathering and compression agreement with a major Barnett Shale producer for an additional 50 MMcf of gas per day on its North Texas gathering system. Crosstex constructed a compressor station on an existing gathering line to accommodate the customer’s transportation requirements. Incremental investment required for the project is estimated to be less than $10 million, and the annual cash flow from the agreement is expected to be approximately $8 million.
“We expect higher gathered volumes in 2011, and anticipate both of these North Texas projects will make a meaningful contribution to the increase. We believe the peak flow rate from these projects will be 150-175 MMcf of gas per day in 2012,” said Davis. “We can take advantage of these low-cost, high-return investment opportunities due to the strategic position of our assets in the core of the Barnett Shale. We will continue to invest in these types of projects in North Texas.”