Houston-based Copano Energy LLC has agreed to acquire the McMullen Lateral pipeline, a 151-mile, 24-inch diameter line extending from McMullen County, TX, to Wharton County, TX, from Williams’ Transco subsidiary.

Copano’s board also has approved construction projects to integrate the McMullen Lateral with Copano’s Houston Central gas processing and treating facilities, including construction of approximately 25 miles of 24-inch pipeline diameter to deliver gas from the McMullen Lateral to Copano’s Houston Central plant for processing, and approximately 25 miles of 16-inch diameter pipeline to gather gas and to deliver residue gas to Transco’s Zone 1 pool at Compressor Station 30 in Wharton County.

These projects will provide McMullen Lateral shippers with access to numerous pipelines, including Transco, and will also provide an additional residue gas outlet for Copano’s Houston Central processing plant. Copano anticipates that the combined acquisition and integration costs will be about $110 million.

“When completed, the transaction and related projects will provide significant benefits to shippers on the Lateral, Copano’s existing suppliers and Williams’ downstream shippers, and will significantly enhance Copano’s South Texas midstream operations,” said Copano CEO John Eckel.

Closing of the transaction is subject to receipt of Federal Energy Regulatory Commission authorizations. Copano said it expects that a filing with FERC will be made within 30 to 60 days. The company plans to finance the transaction and related projects with existing liquidity sources and anticipates making these capital expenditures primarily in 2009 and 2010.

“There’s a lot of activity in Texas, even historic areas where we’ve had some of our original operating areas, people are drilling wells and having amazing amounts of pay…It’s very exciting potential; we’ll see how it drills out,” Eckel told financial analysts in August (see Daily GPI, Aug. 11).

Copano is a midstream gas company with operations in Oklahoma, Texas, Wyoming and Louisiana.

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