Crosstex Energy LP Enters Planning Mode for a New Natural Gas Pipeline in Texas

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Crosstex Energy Partners PL (NASDAQ:XTEX) (Dallas, Texas) is planning to construct a new natural gas pipeline in Northeastern Texas. Crosstex has completed project feasibility studies and has already entered into definitive agreements with producers for capacity on the new North Texas Pipeline project. The pipeline is designed to provide market outlets for the growing Barnett Shale natural gas production.

The proposed 122-mile, 24-inch diameter pipeline will originate just north of Fort Worth, Texas, near the Alliance Airport and will interconnect with Natural Gas Pipeline of America, Houston Pipeline Company, and Kinder Morgan Texas in Lamar County, Texas. Crosstex also has additional commitments from producers to construct an additional 110 miles of gathering pipeline to connect natural gas supply from the Tarrant County area. The North Texas Pipeline project will cost an estimated $98 million and will have an initial natural gas transmission capacity of 250 million cubic feet per day. A single compressor station being proposed for the Paris, Texas area will supply compression for the pipeline. Either one or two 3,500 horsepower engine-driven compressor packages will be installed at this location. Additional volumes of up to 350 million cubic feet per day could be achieved if the second compressor package is installed.

Crosstex expects to select a general contractor in June or July 2005 and begin construction on the North Texas Pipeline project soon afterwards. The completion and in-service date for the new pipeline is scheduled for January 2006. Crosstex currently operates over 4,500 miles of pipelines, five natural gas processing plants, over 60 amine plants and has a total system capacity of 1.5 billion cubic feet per day. The North Texas Pipeline project marks a major step for Crosstex by moving from the world of acquisitions to the world of new pipeline construction.

This project is one of 22 planned oil and gas transmission projects in the state of Texas, totalling $1.5 billion in TIV. Click on the image at right to view a chart showing spending by PEC Market Zone for these projects.

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