Crosstex Energy, Apache to Jointly Invest in Permian Basin Facility
The Crosstex Energy companies announced a partnership with Apache to jointly invest $85 million in a new-build natural gas processing facility in the Permian Basin in West Texas. The initial phase of the project will provide interim and long-term processing solutions, compression and residue gas takeaway for Apache's Deadwood development in Glasscock County. Crosstex and Apache will fund the processing project equally and each hold a 50 percent working interest. Separately, Crosstex will buy and upgrade a nearby rail terminal to provide transportation of natural gas liquids (NGL) to its Eunice fractionation facility in southern Louisiana.
Initially, Crosstex and Apache will install a refrigeration plant with a capacity of 20 million cubic feet (MMcf) per day as an interim gas processing solution, compression and takeaway, all of which are expected to be operational by the fourth-quarter 2011. A cryogenic gas processing facility with a capacity of 50 MMcf per day is expected to be operational in the second-quarter 2012. Crosstex will manage construction and operate the facilities.
"Crosstex is excited to embark on this joint interest project with Apache, a premier independent energy company that has operated in the Permian Basin in West Texas for nearly 20 years and is one of the largest producers in the region with an active drilling program. We are extremely pleased Crosstex can provide Apache with creative midstream solutions for their gas and NGL products," said Barry E. Davis, Crosstex President and Chief Executive Officer. "We look forward to continuing our long-term working relationship with Apache.
"This transaction provides Crosstex with a significant footprint for future growth in the Permian Basin area where we will pursue additional business opportunities," Davis added.
Additionally, Crosstex will purchase and upgrade the abandoned Patriot Fractionator in Midland County. The facility will be upgraded and refurbished to initially serve as a rail terminal for Apache raw make NGL. Crosstex will transport NGL via rail to its Eunice fractionation facility in south central Louisiana for fractionation and sales. Product will be delivered to the Mesquite terminal via existing NGL pipelines or by trucks. Crosstex will invest $12 million in the project, which is scheduled to be completed and operational in the fourth-quarter 2011. This facility will provide NGL takeaway for the constrained Permian infrastructure until a long term pipeline solution becomes available.
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Company: Crosstex Energy more info
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