Tying the ribbon around its previously announced transaction, Crosstex Energy LP said last week that it has completed the acquisition of a package of assets in Mississippi, Texas, Alabama and Louisiana from Duke Energy Field Services LP (DEFS) for $67.35 million, after the effect of certain purchase price adjustments.

The acquisition raises the Dallas-based midstream natural gas company’s total miles of gathering and transmission pipeline from approximately 1,700 to approximately 2,500, an increase of 47%, and increases volumes handled by Crosstex to over 1 Bcf/d, based on 2003 first quarter volumes for Crosstex and the acquired assets. The deal with DEFS, which said it would use proceeds from the sale to pay down debt, was first announced in early May (see NGI, May 5).

“We are pleased to close this transaction, and express our thanks to the Duke personnel with whom we have worked to complete the acquisition,” said Barry E. Davis, Crosstex CEO. “We are excited about the assets we have acquired and the personnel operating them, who today become a part of the Crosstex employee team.”

Under the agreement, Crosstex added the AIM Pipeline System, a 12.4% interest in the Seminole Gas Processing Plant, the Conroe Gas Plant and Gathering System, the Black Warrior Pipeline System and two smaller Louisiana systems.

The AIM Pipeline System (to be renamed Crosstex Mississippi Pipeline) is a gathering and transmission system that gathers wellhead production in south-central Mississippi and markets gas to industrial and power plant users. Covering 15 counties, the system consists of 625 miles of 4-inch through 20-inch pipeline. Recent throughput on the system has averaged approximately 82 MMcf/d.

The Amerada Hess-operated Seminole plant located in Gaines County, TX provides CO2 separation, NGL extraction, and sulfur recovery services for several major oil companies. The facility has dedicated long-term reserves from the Seminole San Andres Unit, with a stable dedicated utilization of the CO2 made available for tertiary oil recovery. Crosstex said the plant is in the process of completing a capacity expansion from 150 MMcf/d to 210 MMcf/d.

The Conroe system is a cryogenic gas processing plant with 10 miles of gathering pipelines located within the Conroe Field Unit in Montgomery County, TX. Recent throughput on the system has been about 30 MMcf/d.

The Black Warrior system (to be renamed the Crosstex Alabama Gathering System) consists of approximately 125 miles of 4-inch to 12-inch gathering systems in Alabama. The primary gas supply is from coalbed methane gas from the Black Warrior Basin, with recent average throughput of approximately 13,800 MMBtu/d.

The two smaller gas systems included in the deal are the Aurora Centana and Cadeville in Louisiana.

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