Crosstex Energy to Expand Barnett Shale Pipeline
Crosstex Energy says that it will construct a 29-mile natural gas pipeline in north Johnson County, Texas, to provide greater takeaway capacity to natural-gas producers in the Barnett Shale formation. Total capital costs are estimated to be approximately $80 million.
The ultimate capacity of the low-pressure and high-pressure gathering system will be approximately 400 million cubic feet of gas per day (MMcf/d) when all phases of pipeline construction are completed, which is planned for the second quarter of 2008. Initially, the pipeline will transport approximately 80 MMcf/d, and is scheduled to begin deliveries in the third quarter of 2007. Full capacity utilization is expected by 2009, and cash returns are expected to be commensurate with other Crosstex investments.
Crosstex has secured commitments from numerous gas producers to move gas through the new pipeline. Some of the commitments are from major exploration and production companies that operate in the Barnett Shale, including Chesapeake Energy, the anchor shipper. The north Johnson County pipeline project will include 20-inch and 24-inch pipeline and three compressor stations totaling 36,000 horsepower.
"We're continuing to expand our significant position in the Barnett Shale by making a sizable investment to meet the growing demand of producers in the hottest natural gas play in the United States," said Barry E. Davis, Crosstex President and Chief Executive Officer. "We are constructing the first large-diameter low-pressure gathering lines into what is becoming the new heart of the Barnett Shale. The expansion will provide new and existing Crosstex customers with much-needed outlets to Texas markets and access to long-haul transportation pipelines to other major U.S. markets."
Crosstex Energy, L.P., a midstream natural gas company headquartered in Dallas, operates over 5,000 miles of pipeline, 12 processing plants, four fractionators, and approximately 200 natural gas amine-treating plants and dew point control plants. Crosstex currently provides services for over 3.5 Bcf/day of natural gas, or approximately 7.0 percent of marketed U.S. daily production.
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- Crosstex Energy to Expand Barnett Shale Pipeline (Aug 30)