By Houston Business Journal

A joint venture between Kinder Morgan Energy Partners LP and Copano Energy LLC has been selected by SM Energy Co. to supply natural gas production.

Financial details of the long-term gas services agreement were not disclosed.

The two Houston-based companies each have a 50 percent stake in Eagle Ford Gathering LLC, which was formed in May to serve natural gas producers in South Texas.

Under the agreement, Denver-based SM Energy, formerly St. Mary Land & Exploration Co., will commit up to 200,000 million British Thermal Units per day of Eagle Ford Shale natural gas production over a 10-year term from LaSalle, Dimmit and Webb counties in Texas.

In return, Eagle Ford Gathering will construct 85 milles of pipeline, which is expected to be in service in mid-2011.

Kinder Morgan (NYSE: KMP) and Copano (NASDAQ: CPNO) plan to invest $137 million in the first phase of the Eagle Ford Gathering project and have each committed 375,000 MMBtu per day of capacity. Copano serves as operator.

Copyright 2010 American City Business Journals
Copyright 2010