HOUSTON, Jan. 28 /CNW/ -- Midcontinent Express Pipeline LLC (MEP) today
announced it has entered into a contract with Newfield Exploration
Mid-Continent Inc. (Newfield) for a minimum of 200,000 dekatherms per day of
additional firm capacity on the MEP transmission system. The natural gas
production will originate from Newfield's Woodford Shale play in southeast
"MEP is delighted to enter into this long-term, binding precedent
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 future production growth to
flow to markets further east. MEP now has long-term binding commitments of
approximately 1.2 billion cubic feet per day (Bcf/d) from creditworthy
shippers on the 1.4 Bcf/d pipeline project."
In conjunction with Newfield's contracted commitment, MarkWest Pioneer,
L.L.C. (MarkWest) a subsidiary of MarkWest Energy Partners L.P., will be
constructing a new pipeline from the Woodford Shale to a new receipt point
with MEP in Bryan County, Okla. In addition, MEP and MarkWest have entered
into an option agreement, which provides MarkWest the one-time right to
purchase 10 percent of the equity in MEP after the pipeline is fully
constructed and placed into service. If the option is exercised, Kinder
Morgan and Energy Transfer Partners will each own 45 percent of the equity in
the project, while MarkWest will own 10 percent.
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 Sand in Texas, the Fayetteville Shale in Arkansas and the Woodford
Shale in Oklahoma, as well as other new and existing gas supplies in the
"Energy Transfer is excited about adding Newfield to the growing list of
MEP shippers 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, Sr. 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 exited 2005 with 25 MMcfe/d of gross production in the Woodford. We
exited 2006 producing 85 MMcfe/d, 2007 at 165 MMcfe/d and we expect to exit
2008 with another 50 percent increase in rate at approximately 250 MMcfe/d.
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 project will extend from southeast
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 262 miles of 42-inch, 197
miles of 36-inch and 40 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,
Midcontinent Express is scheduled 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
Shippers seeking to contract for firm capacity or who need additional
information on MEP should contact David Matney at (713) 369-9218, Kim Corley
at (713) 369-9436 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 24,000 miles of pipelines and 150 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 approximately $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
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.
For further information:
For further information: Media Relations, Joe Hollier, +1-713-369-9176,
or Investor Relations, Mindy Mills, +1-713-369-9490, both of Kinder Morgan;
or Media Relations, Vicki Granado of Gittins & Granado, office,
+1-214-504-2260, cell, +1-214-498-9272; or Investor Relations, Renee Lorenz
of Energy Transfer, +1-214-981-0700 Web Site: http://www.kindermorgan.com