By OGJ editors
HOUSTON, May 26 -- Crosstex Energy LP, Dallas, plans to expand and extend the Crosstex LIG pipeline system to access natural gas being developed in northwestern Louisiana and to receive as much as 700 MMcfd of gas from East Texas to be delivered by a new interstate pipeline of Kinder Morgan Energy Partners LP (KMEP).
The estimated cost for the project is $225 million. It is expected to generate cash flow of $40 million/year once the connection to the proposed KMEP line is completed. The partnership engaged an engineering firm to complete a project feasibility study by June 30. The expansion is expected to be in operation by the summer of 2006.
On May 25 KMEP announced its open season for firm gas transportation shippers for its proposed Kinder Morgan Carthage Pipeline. This expansion is needed as producers bring online large volumes of new gas production from the Bossier and Barnett Shale formations, officials said.
Pipeline take-away capacity from these new fields has been limited, with most of the new capacity delivering the new production to the Carthage, Tex., area where many interstate pipelines converge.
Capacity to move gas east from Carthage has been limited. KMEP and Natural Gas Pipeline Co. of America, a subsidiary of Kinder Morgan Inc., have developed a project, which, when connected to the Crosstex LIG system, will expand take-away capacity by as much as 700 MMcfd. Crosstex and KMEP worked together to plan the expansion of capacity out of East Texas.
Extension of the Crosstex LIG system includes 65 miles of 36-in. pipeline starting from the existing system near Natchitoches and ending near Shreveport, La., where it will connect with the proposed Kinder Morgan Carthage Pipeline.
New gathering laterals will enable north Louisiana producers to access the new line. Within the existing LIG system, eight miles of pipeline will be looped to add capacity to move the large volumes anticipated.
