Crosstex Completes $115 Million North Texas Pipeline

Crosstex Energy on Wednesday said that construction of the 24-inch-diameter North Texas Pipeline (NTPL) facilities is completed.

The pipeline spans 140 miles across six North Texas counties. It will gather and transport gas out of the Barnett Shale, which is the largest active natural gas play in the continental U.S.

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, and the remaining portion of the system began flowing on Tuesday. 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. Production is forecast to reach up to 3 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," said Barry E. Davis, president and chief executive officer of Crosstex. "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."

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.

Crosstex began purchasing rights-of-way across Tarrant, Denton, Collin, Fannin, Delta, and Lamar counties in early 2005. Construction commenced in October 2005. More than 400 workers in two construction spreads worked to complete the project on an aggressive schedule, with a target flow of first quarter 2006.

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 the southern portion of the county. Crosstex is also designing another processing plant near Azle, where gas will be gathered, processed, and then delivered to the NTPL 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.