In an effort to pool Kansas natural gas gathering assets while also looking to produce gas within the state, Saxon Oil Co. Ltd. said Tuesday its Central Kansas Gas Gathering (CKGG) subsidiary has signed a joint venture agreement with Mid Kansas Gas Gathering LLP (MKG) of Wichita, KS.

The 50-50 joint venture, called Mid Kansas Gas Gathering JV (MKGG), will be headquartered in Wichita with American Energies Pipeline LLC acting as operator. According to the companies, the joint venture combines more than 400 miles of natural gas gathering systems and includes the purchase of a 10 MMcf/d processing plant to be located at a central processing and sales point along the combined systems. The companies announced that MKGG’s primary purpose is to provide low-Btu natural gas producers in central Kansas with gathering, processing, treating and other natural gas services.

The MKGG joint venture consists of CKGG’s 230 miles of pipe and another 200 miles of pipe owned by MKG. MKGG’s gathering systems are located in McPherson, Rice, Barton, Harvey, Kingman, McPherson, Pawnee and Reno counties. The largest system is approximately 125 miles of pipe that stretch east and west between Conway and Great Bend, KS, across McPherson, Rice and Barton counties, with secondary, perpendicular lines connecting to it.

Another large system, consisting of approximately 48 miles of pipe and compression facilities, is located west of Great Bend, KS, in Pawnee County. In addition to the gathering systems, MKGG has acquired the previously mentioned gas processing plant, which is being upgraded to handle nitrogen and helium extraction and will be mobilized to Kansas later this year. Plant operations expected to commence in the first half of 2009.

“The joint venture with [American Energies] experienced technical team is an exciting opportunity for CKGG and Saxon,” stated Steve Moore, president of CKGG. “Besides the joint venture of our gas gathering assets, American Energies and Saxon will jointly explore for and produce natural gas along the existing gathering systems.”

Saxon Oil, which bills itself as “a Tier One Texas-based Canadian company,” is engaged in the acquisition, development and production of oil and natural gas reserves.

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