Eagle Ford Gathering LLC, a 50/50 joint venture between Kinder Morgan
Energy Partners, L.P. (NYSE: KMP) and Copano Energy, L.L.C. (NASDAQ:
CPNO) established to serve natural gas producers in South Texas, today
announced the execution of a definitive long-term gas services agreement
with SM Energy Company (formerly St. Mary Land & Exploration Company).
Under terms of the agreement, SM Energy will commit up to 200,000 MMBtu
per day of Eagle Ford Shale natural gas production over a 10-year term
from LaSalle, Dimmit and Webb counties in Texas. Eagle Ford Gathering
will provide gathering, transportation and processing services and will
construct approximately 85 miles of 24- and 30-inch pipeline from SM
Energy’s acreage in the western Eagle Ford Shale play to Kinder Morgan’s
Freer compressor station in Duval County, Texas. The pipeline is
expected to begin service during the summer of 2011.
"We are pleased Eagle Ford Gathering has been selected to provide SM
Energy with a full slate of midstream services in the Eagle Ford Shale
region," said Bruce Northcutt, Copano Energy’s President and Chief
Executive Officer. "Consistent with our strategy, the gas services
agreement with SM Energy will generate long-term, fee based cash flows
for the joint venture and for Copano. We are excited to move forward
with the construction of the pipeline, which will expand our footprint
in the Eagle Ford and enhance our ability to meet the needs of producers
in the region."
Tom Martin, President of Kinder Morgan’s Natural Gas Pipelines, said,
"The Eagle Ford Gathering joint venture with Copano is one of several
initiatives that we have undertaken at Kinder Morgan to access the major
natural gas shale plays in the United States. Providing transportation
and midstream services to producers like SM Energy in the Eagle Ford
Shale will result in expansion of our Texas intrastate pipeline system
and incremental cash flow for our unitholders. We are delighted to enter
into this significant initial agreement with SM Energy and discussions
are ongoing with other producers for the remaining project capacity."
Kinder Morgan and Copano will invest approximately $137 million in phase
one of the project and have each committed 375,000 MMBtu per day of
capacity to Eagle Ford Gathering for transportation on Kinder Morgan’s
intrastate pipeline from Laredo-to-Katy and for processing at Copano’s
Houston Central processing plant. Copano serves as operator and managing
member of Eagle Ford Gathering.
About Kinder Morgan Energy Partners, L.P.
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 approximately 28,000 miles of pipelines and 180 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
$30 billion. The general partner of KMP is owned by Kinder Morgan, Inc.,
a private company. Kinder Morgan Management is a limited partner in KMP
and manages and controls its business and affairs. For more information
please visit www.kindermorgan.com.
About Copano Energy, L.L.C.
Houston-based Copano Energy, L.L.C. (NASDAQ: CPNO) is a midstream
natural gas company with operations in Oklahoma, Texas, Wyoming and
Louisiana. Its assets include approximately 6,400 miles of active
natural gas gathering and transmission pipelines, 250 miles of NGL
pipelines and eight natural gas processing plants, with over one Bcf per
day of combined processing capacity. For more information please visit www.copanoenergy.com.
Forward-Looking Statements
This news release includes forward-looking statements. Although
Kinder Morgan and Copano Energy believe that their expectations are
based on reasonable assumptions, they can give no assurance that such
assumptions will materialize or that the proposed transactions will be
consummated. Important factors that could cause actual results to differ
materially from those in the forward-looking statements in this release
include: the impact of inflation on project costs and the availability
of required resources; the effects on the project schedule, project
costs, or both, of numerous regulatory, environmental, political, legal
and operational uncertainties; the impact on volumes and resulting cash
flow of technological, economic and other uncertainties inherent in
estimating future production and producers’ ability to drill and
successfully complete and attach new natural gas supplies, and the
availability of downstream transportation systems and other facilities
for natural gas and NGLs. These and other risks and uncertainties are
described in the risk factors sections of Kinder Morgan’s and Copano
Energy’s Forms 10-K and 10-Q as filed with the Securities and Exchange
Commission.
