The Crosstex Energy companies have upsized their Cajun-Sibon natural gas liquids (NGL) Louisiana-Texas pipeline extension project and plan to have it in service during the first half of 2013, Crosstex Energy LP and Crosstex Energy Inc. said Wednesday.
The 130-mile, 12-inch diameter pipeline is to extend the partnership's existing 440-mile Cajun-Sibon NGL system and connect Crosstex's NGL fractionation facilities in south-central Louisiana to Mont Belvieu supply pipelines in East Texas.
"The extension allows the partnership to provide producers and midstream companies an attractive alternative market for their NGL production at Mont Belvieu pricing," Crosstex said.
The partnership is currently negotiating additional long-term agreements for the remaining capacity and expects the new pipeline to begin operations at or near its initial capacity of 70,000 b/d of NGLs. "The willingness of midstream and producer customers to make long-term commitments reflects increasing demand for fractionation and NGL handling as producers continue to pursue liquids-rich natural gas plays," said Crosstex CEO Barry E. Davis.
Construction is to begin in the third quarter. Due to strong supplier interest, the pipeline project has been expanded since it was announced last July (see Shale Daily, July 27, 2011) and now includes an additional supply connection. Total capital investment is estimated at $230 million. The new pipeline and facilities are expected to be operational in the first half of 2013.
As previously announced, the partnership has entered into a long-term ethane sales agreement with Williams Olefins LLC.
"The partnership's facilities in South Louisiana provide an attractive ethane market, as well as market access for the remaining components of the NGL barrel," Crosstex said.