The Crosstex Energy companies, Crosstex Energy, L.P. (NASDAQ:XTEX) (the Partnership) and Crosstex Energy, Inc. (NASDAQ:XTXI) (the Corporation), today announced that the Partnership is proceeding with Phase II of the Partnership’s Cajun-Sibon natural gas liquids (NGL) pipeline extension and fractionator expansion in Louisiana. In addition, construction of Phase I of the project is underway and is expected to commence operations by mid-2013. The total capital investment for both phases of the project is currently estimated at $680-$700 million. The Partnership expects Phase II to have an annual run-rate adjusted EBITDA contribution of $75-$85 million.
Phase II, which is expected to be completed in the second half of 2014, will include the following: the expansion of the Partnership’s Cajun-Sibon pipeline capacity by an additional 50,000 barrels per day of raw-make NGL for a total project capacity of 120,000 barrels per day; the installation of a 100,000-barrel-per-day fractionator adjacent to the Partnership’s Plaquemine natural gas processing plant; the modification of the Riverside fractionator facility; the construction of a 32 mile extension of LIG’s Bayou Jack Lateral that will provide gas services to customers in the Mississippi River corridor; the installation of four pump stations totaling 13,400 horsepower and the construction of 57 miles of NGL pipelines that will originate at the Partnership’s Eunice fractionator and connect to the new Plaquemine fractionator.
The Partnership announced that it has entered into 10-year sales agreements with Dow Hydrocarbons and Resources LLC. Under the sales agreements, the Partnership will deliver up to 40,000 barrels per day of ethane and 25,000 barrels per day of propane produced at the Partnership’s new Plaquemine fractionator into Dow’s Louisiana pipeline system. The Partnership will also deliver 70,000 million British thermal units of natural gas per day to Dow’s Plaquemine facility.
“We are very pleased that the market continues to be strongly supportive of our Cajun-Sibon project. With an estimated combined adjusted EBITDA of $115 to $130 million, we believe Phases I and II will significantly increase our PNGL assets’ contribution to the bottom line, creating significant value for our investors,” said Barry E. Davis, Crosstex President and Chief Executive Officer.
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