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Midcontinent Express Pipeline Announces Additional Capacity Commitment
HOUSTON--(BUSINESS WIRE)--Midcontinent Express Pipeline LLC (MEP) a natural gas pipeline project jointly owned by Kinder Morgan Energy Partners and Energy Transfer Partners, today announced it has amended its binding precedent agreement with Newfield Exploration Mid-Continent Inc. (Newfield) to increase the maximum daily quantity by 100,000 dekatherms per day (dth/day). Newfield's maximum daily quantity now totals approximately 300,000 dth/day of firm capacity on the MEP transmission system. In addition, Newfield has dedicated up to an additional 150,000 dth/day of natural gas production as it becomes available which may increase its firm capacity on MEP to as much as 450,000 dth/day. The natural gas production will originate from Newfield’s Woodford Shale play in southeast Oklahoma.
“MEP is delighted to increase the volume on this long-term agreement with Newfield, the Woodford Shale’s largest producer and most active driller,” said Scott Parker, president of Kinder Morgan’s natural gas pipelines. “This agreement assures that Newfield will have significant pipeline capacity for its current production and will be able to increase its firm capacity to accommodate future production growth to flow to markets further east. MEP now has long-term binding commitments of over 1.4 billion cubic feet per day (Bcf/d) which do not include the above 150,000 dth/day of dedication. The MEP project can be expanded to up to 2.0 Bcf/d with additional compression if needed to meet shipper needs.”
MEP will strengthen the nation’s energy infrastructure by providing access to Midwest, Northeast, Mid-Atlantic and Southeast markets for growing domestic onshore supplies of clean-burning natural gas from the Barnett Shale and Bossier Sands in Texas, the Fayetteville Shale in Arkansas and the Woodford Shale in Oklahoma, as well as other new and existing sources of gas supply in the region.
“Energy Transfer Partners is excited about the volume increase and further dedication under the Newfield precedent agreement, and we look forward to working with them as they develop their acreage holding in the Woodford Shale. The timing of the MEP project is aligned with Newfield’s development, and when coupled with Energy Transfer’s pipeline systems, provides Newfield significant flexibility and market diversification as they develop this rapidly emerging resource play,” said Lee Hanse, Senior Vice President of Energy Transfer.
“The Woodford Shale play is the fastest growing component of our portfolio today,” said David A. Trice, Newfield chairman, president and CEO. “We remain the leader in the Woodford Shale and our production is rapidly growing. We exited 2007 at 165 million cubic feet equivalent per day (MMcfe/d) (gross) and have already increased volumes an additional 15 percent since that time to a recent high of 187 MMcfe/d (gross). We are early in the development of this play, which will provide years of production and reserve growth. This agreement ensures that a large portion of our expected future production from the Woodford will move out of the region on firm transportation, reducing both basis risk and pricing volatility.”
The approximately $1.3 billion MEP project will extend from southeastern Oklahoma, across northeast Texas, northern Louisiana and central Mississippi, to an interconnection with the Transco Pipeline near Butler, Ala. The approximately 500-mile pipeline will consist of 266 miles of 42-inch, 202 miles of 36-inch and 39 miles of 30-inch pipe, and have up to 13 receipt and/or delivery interconnections. The delivery interconnections will provide access to numerous downstream markets, including those served by the NGPL, Transco, Texas Eastern, Tennessee, Columbia Gulf, Texas Gas, Southern Natural, Destin and ANR pipelines. Subject to receipt of regulatory approvals, construction is scheduled to begin this summer and the pipeline is expected to be in service by March 2009.
Midcontinent Express Pipeline is a 50/50 joint venture between Kinder Morgan Energy Partners, L.P. (NYSE:KMP) and Energy Transfer Partners, L.P. (NYSE:ETP).
KMP is managing the construction of the project and will operate the pipeline. More information on the project is available at www.midcontinentexpress.com.
Shippers seeking to contract for firm capacity or who need additional information on MEP should contact David Matney at (713) 369-9218 or Kim Watson at (713) 369-9233.
Kinder Morgan Energy Partners, L.P. is a leading pipeline transportation and energy storage company in North America. KMP owns an interest in or operates more than 25,000 miles of pipelines and 165 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle bulk materials like coal and petroleum coke. KMP is also the leading provider of CO2 for enhanced oil recovery projects in North America. One of the largest publicly traded pipeline limited partnerships in America, KMP has an enterprise value of over $20 billion. The general partner of KMP is owned by Knight Inc. (formerly Kinder Morgan, Inc.), a private company.
Energy Transfer Partners, L.P. (NYSE:ETP) is a publicly traded partnership owning and operating a diversified portfolio of energy assets. ETP has pipeline operations in Arizona, Colorado, Louisiana, New Mexico and Utah, and owns the largest intrastate pipeline system in Texas. ETP’s natural gas operations include intrastate natural gas gathering and transportation pipelines, natural gas treating and processing assets and three natural gas storage facilities located in Texas. These assets include approximately 14,000 miles of intrastate pipeline in service, with approximately 500 miles of intrastate pipeline under construction, and 2,400 miles of interstate pipeline. ETP is also one of the three largest retail marketers of propane in the United States, serving more than one million customers across the country.
Energy Transfer Equity, L.P. (NYSE:ETE) owns the general partner of Energy Transfer Partners and approximately 62.5 million ETP limited partners units. Together ETP and ETE have a combined enterprise value of approximately $20 billion.
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Kinder Morgan believes that its expectations are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein are enumerated in Kinder Morgan’s Forms 10-K and 10-Q as filed with the Securities and Exchange Commission.
Joe Hollier
Media Relations
Kinder Morgan
(713) 369-9176
Mindy Mills
Investor Relations
Kinder Morgan
(713) 369-9490
Vicki Granado
Media Relations
Granado Communications Group
(214) 504-2260 office
(214) 498-9272 cell
Renee Lorenz
Investor Relations
Energy Transfer
(214) 981-0700
www.energytransfer.com |
