DCP Midstream Partners and M2 Midstream Announce Joint Development Agreement For Haynesville Shale Intrastate Pipeline
DENVER and HOUSTON, Aug. 5 /PRNewswire-FirstCall/ -- DCP Midstream Partners, LP (NYSE: DPM), or DCP, and M2 Midstream LLC, or Momentum, today announced they have signed an agreement to pursue development of a new large diameter natural gas pipeline to move gas from the emerging Haynesville Shale play in North Louisiana. As an extension of DCP's Pelico Intrastate Pipeline, the new pipeline, named the Haynesville Connector, would originate in western DeSoto Parish and extend over 150 miles to Delhi, La., providing access to takeaway pipelines in the Delhi area such as the Southeast Supply Header (SESH), Columbia Gulf Transmission, ANR Pipeline, Trunkline Gas Company, Texas Gas Transmission, Tennessee Gas, Centerpoint Energy and Gulf South Pipeline. If built, the Haynesville Connector is expected to commence initial deliveries in the third quarter of 2009 and would offer an estimated 1.5 billion cubic feet per day of takeaway capacity by early 2010 to help meet producers' anticipated needs for pipeline infrastructure in the Haynesville Shale.
"Producers in the Haynesville-Lower Bossier shale area in East Texas and North Louisiana are enthusiastic about results from initial wells which are meeting or exceeding their expectations, and these results are bolstering forecasts for natural gas production in the area," said Mark Borer, president and CEO of DCP. "DCP and Momentum are well positioned to provide critical pipeline infrastructure to serve the near term needs of Haynesville Shale producers by leveraging Pelico's existing infrastructure, located within the core geography of the shale. Importantly, this will ensure early capacity availability to help keep pace with anticipated drilling and allow additional flexibility in the markets available to producers. We are pleased to partner with Momentum who has proven success in building modern infrastructure to support the rapid development of natural gas production in some of North America's fastest growing plays, most recently in the Barnett Shale play of the Fort Worth Basin and in the Piceance Basin."
Currently, DCP's Pelico Intrastate Pipeline serves numerous intrastate and interstate markets, including the Perryville Hub, and is strategically located to facilitate the transportation of Haynesville Shale gas to those markets and to growing markets in the eastern and northeastern areas of the United States. The Pelico assets along with additional gathering assets owned by DCP and Momentum can help provide an interim solution to producers' natural gas delivery needs in advance of the Haynesville Connector construction timeline.
"Momentum and DCP have been working on the Haynesville Connector for several months in order to provide Haynesville Shale producers with access to a long-term takeaway solution on an accelerated timeline," said Frank Tsuru, President and CEO of Momentum. "Our complementary skill sets will ensure a well designed pipeline is built on schedule with a focus on customer service. We look forward to working with DCP on this significant opportunity to be part of this emerging natural gas play."
The DCP and Momentum joint venture remains subject to the execution of definitive agreements.
For more information about the Haynesville Connector, contact Brian Frederick (DCP) at 713-735-3667 or George Francisco (Momentum) at 713-783-3000.
M2 Midstream LLC is a natural gas midstream company based in Houston, Texas. The company currently owns and operates the M2 Fairplay gathering system located in East Texas and the State Line gathering system located in DeSoto Parish, Louisiana. For more information, visit M2's website at http://www.m2midstream.com
DCP Midstream Partners, LP (NYSE: DPM) is a midstream master limited partnership that gathers, processes, transports and markets natural gas, transports and markets natural gas liquids, and is a leading wholesale distributor of propane. DCP Midstream Partners, LP is managed by its general partner, DCP Midstream GP, LLC, which is wholly owned by DCP Midstream, LLC, a joint venture between Spectra Energy and ConocoPhillips. For more information, visit the DCP Midstream Partners, LP Web site at http://www.dcppartners.com.
SOURCE DCP Midstream Partners, LP; M2 Midstream LLC
Contact: Karen L. Taylor of DCP Midstream Partners, LP, +1-303-633-2913, +1-303-809-9160; or George Francisco of M2 Midstream LLC, +1-713-783-3000