DALLAS, Apr 07, 2011 (BUSINESS WIRE) -- Crosstex Energy, L.P. (NASDAQ: XTEX) (the Partnership) and Crosstex Energy, Inc. (NASDAQ: XTXI) (the Corporation) announced today that the Partnership 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. In addition, the Partnership has reactivated its Eunice natural gas liquids (NGL) fractionator in south central Louisiana, which will give Crosstex operational flexibility, increased fractionation capacity and the ability to capture new NGL-related business. The two North Texas projects became operational in late March 2011 and the Euncie NGL fractionator became operational April 5, 2011.
"We are extremely pleased to have completed these significant projects on time and on budget. We are capitalizing on the growth opportunities in both the Barnett Shale play in North Texas and in Southern Louisiana's energy corridor. We see tremendous upside for incremental business in both regions," said Barry E. Davis, Crosstex President and Chief Executive Officer.
North Texas Gas Gathering System Expanded
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."
Eunice NGL Fractionator Restarted
In south central Louisiana, Eunice NGL fractionator was reactivated with the necessary equipment to accommodate 15,000 barrels of NGLs per day. Additional capacity of 21,000 barrels per day can be restarted as supplies grow.
"We have great flexibility to increase the utilization of our asset infrastructure in Southern Louisiana. Demand for fractionation and NGL handling is increasing as producers make liquids-rich gas production a priority," said Davis.
The Eunice start-up and expansion project will increase the Partnership's existing fractionation capacity for liquids products from 40,000 barrels per day to 55,000 barrels per day. The initial incremental investment required to restart the fractionator is approximately $7.6 million, and the annual cash flow to be generated from the expansion will be approximately $3.5 million with current committed volumes.
The Eunice complex, which includes the fractionator and a gas processing plant, provides access to important Southern Louisiana petrochemical and refinery markets and the Dixie Pipeline Company's propane pipeline. Restart of the fractionator, which has been idle since 2007, provides Crosstex with new business opportunities. The Eunice site includes a truck and rail unloading terminal that receives NGLs for fractionation from U.S. markets, including volumes from the Marcellus and other emerging shale plays, where there are limited markets and NGL infrastructure. In addition, the Eunice complex is connected to onshore natural gas supply in Louisiana, and shallow and deep water production from the Gulf of Mexico.
About the Crosstex Energy Companies
Crosstex Energy, L.P., a midstream natural gas company headquartered in Dallas, operates approximately 3,300 miles of pipeline, nine processing plants and three fractionators. The Partnership currently provides services for 3.2 billion cubic feet of natural gas per day, or approximately six percent of marketed U.S. daily production.
Crosstex Energy, Inc. owns the two percent general partner interest, a 25percent limited partner interest and the incentive distribution rights of Crosstex Energy, L.P.
Additional information about the Crosstex companies can be found at www.crosstexenergy.com.
This press release contains forward-looking statements within the meaning of the federal securities laws. These statements are based on certain assumptions made by the Partnership and the Corporation based upon management's experience and perception of historical trends, current conditions, expected future developments and other factors the Partnership and the Corporation believe are appropriate in the circumstances.These statements include, but are not limited to, statements with respect to forecasts regarding throughput, cash flow and incremental investment for the projects discussed above,as well as the Partnership's future liquidity, leverage, business and results of operations.Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership and the Corporation, which may cause the Partnership's and the Corporation's actual results to differ materially from those implied or expressed by the forward-looking statements.These risks include, but are not limited to, risks discussed in the Partnership's and the Corporation's filings with the Securities and Exchange Commission.The Partnership and the Corporation have no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE: Crosstex Energy
Jill McMillan, 214-721-9271
Director, Public & Industry Affairs