Crosstex to build Barnett pipe
Dallas-based midstream outfit Crosstex Energy is planning to build an $80 million pipeline to bring gas production out of the Barnett shale trend in Texas to points in the mid-western and eastern US.
The company said it has sufficient commitments to construct a pipeline with initial capacity of 200 million cubic feet per day of natural gas throughput, and expects more commitments to follow.
Crosstex currently plans to build a 110-mile, 24-inch pipeline from a point north of Fort Worth, Texas to interconnect with Natural Gas Pipeline of America and Houston Pipeline in south-east Texas.
Crosstex has engaged an engineering firm to complete a project feasibility study by mid January 2005.
The project is scheduled for completion by January 2006. At an 80% utilisation, cash flow to the partnership from the project is estimated to be about $15 million in the first year of operation.
Crosstex said it can fund initial construction expenditures for the project from its revolving bank facility. As the project progresses, these borrowings will be refinanced with a combination of equity and fixed-rate term debt.