New Pipeline Services Growing Barnett Shale Natural Gas Play
DALLAS, April 5 /PRNewswire-FirstCall/ -- Crosstex Energy, L.P.
(Nasdaq: XTEX) (the Partnership) announced the completion of construction on
the 24-inch diameter North Texas Pipeline (NTPL) facilities, covering more
than 140 miles across six North Texas counties that will gather and transport
gas out of the prolific Barnett Shale. The Barnett Shale is the largest
active natural gas play in the continental United States.
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 2006 and the
remaining portion of the system began flowing on April 4, 2006. 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 with predicted growth of up to three 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.
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," said Barry E. Davis, president and chief executive officer.
"Without the new pipeline, producers and royalty owners would not be able to
efficiently get their product to market."
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.
Rights-of-way across Tarrant, Denton, Collin, Fannin, Delta, and Lamar
counties were purchased by Crosstex Energy starting in early 2005, and
construction commenced in October 2005. Over 400 workers in two construction
spreads worked to complete this large undertaking on an extremely aggressive
schedule, with a target flow of first quarter 2006.
"We have found that the 'if you build it, they will come' message holds
true in the midstream market," said Davis. "Crosstex actively sought anchor
producers willing to commit to the pipeline system, and then endeavored to
aggregate additional throughput while designing, permitting, and building the
system. This strategy has proven to be beneficial for Crosstex and our
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 southern Parker County. Crosstex
is also designing another processing plant near Azle, where gas will be
gathered, processed and then delivered to the North Texas Pipeline 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.
Economic benefits as a result of the new pipeline and processing plants
reach beyond the energy industry. In addition to increased local employment
and retail sales, the new pipeline will be a significant generator of tax
revenue for local governments and schools.
"The entire Crosstex group that worked on this project was very
professional. They answered all of my questions and always let me know what
was going on," said Richard Mayes, landowner and former Texas State Senior
District Judge. "When laying the pipeline in the right of way, Crosstex sought
to be as unobtrusive as possible. They were very good about working with me
about where to locate the pipeline so the impact to my land was very minimal."
About the Crosstex Energy Companies
Crosstex Energy, L.P., a mid-stream natural gas company headquartered in
Dallas, operates over 5,000 miles of pipeline, nine processing plants, four
fractionators, and approximately 150 natural gas amine treating plants and 22
dew point control plants. Crosstex currently provides services for over 3.0
Bcf/day of natural gas, or approximately 6.0 percent of marketed U.S. daily
production based on August 2005 Department of Energy data.
Crosstex Energy, Inc. owns the two percent general partner interest, a 38
percent limited partner interest, and the incentive distribution rights of
Crosstex Energy, L.P.
Additional information about the Crosstex companies can be found at
SOURCE Crosstex Energy, L.P.
/CONTACT: Jill McMillan of Crosstex Energy, L.P., +1-214-721-9271, or
/Web site: http://www.crosstexenergy.com /
CO: Crosstex Energy, L.P.
IN: OIL ENV
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4291 04/05/2006 07:04 EDT http://www.prnewswire.com