Crosstex Energy LP has struck a long-term, fee-based agreement with "a major oil and gas producer" in the Permian Basin that supports the expansion of its gas gathering and processing infrastructure, the company said Thursday.
The agreement builds upon $210 million in investments that Crosstex has made in the Permian to take advantage of growing production. This includes a joint venture with Apache Corp., the Mesquite fractionator and the Bearkat gathering and processing complex.
Crosstex plans to construct a 35-mile, 12-inch diameter high-pressure pipeline to provide gathering capacity for the previously announced Bearkat complex (see Shale Daily, Oct. 30, 2013). The incremental investment for the pipeline extension is expected to be $70 million.
"The Permian Basin has been an important area of growth for Crosstex, and this arrangement strategically expands our footprint in West Texas. Looking to the future as we work to complete our transaction with Devon Energy to create EnLink Midstream [see Shale Daily, Oct. 21, 2013], we are confident that having a solid and scalable gathering and processing footprint in the Permian will be an integral part of our success," said Barry E. Davis, CEO of Crosstex Energy Inc.
The pipeline would be located in the eastern portion of the Wolfberry oil play, originating at Bearkat, which is under construction in Glasscock County. The pipeline will have a capacity of 100 MMcf/d and will provide takeaway solutions for constrained producer customers in Howard, Martin and Glasscock counties. Right-of-way acquisition is under way. The pipeline is expected to be operational in the second half of 2014.