Eagle Ford Gathering LLC, a 50/50 joint venture (JV) between Kinder
Morgan Energy Partners, L.P. (NYSE: KMP) and Copano Energy, L.L.C.
(NASDAQ: CPNO), today announced the execution of a definitive long-term
agreement to provide services to Chesapeake Energy Marketing, Inc., an
affiliate of Chesapeake Energy Corporation (NYSE: CHK), in the Eagle
Ford Shale play in South Texas.
Under the agreement, Chesapeake will commit a significant quantity of
natural gas production from multiple counties in South Texas over a
14-year term. Eagle Ford Gathering will gather Chesapeake’s gas from
major delivery points and provide transportation, processing and
fractionation services. Eagle Ford Gathering’s previously announced
30-inch pipeline in the western Eagle Ford Shale play is under
construction and is expected to begin full service in the third quarter
of 2011; however, certain segments are expected to be available for
service in the first half of the year.
“We are pleased to have the opportunity to provide Chesapeake with a
full slate of services for its rapidly growing Eagle Ford Shale
production,” said R. Bruce Northcutt, Copano Energy’s President and
Chief Executive Officer. “Eagle Ford Gathering’s agreement with
Chesapeake fully subscribes the members’ initial pipeline and processing
capacity commitments of 375,000 MMBtu per day, representing a
significant step in the JV’s growth and in its ability to generate
long-term, fee-based cash flows for the benefit of Copano’s unitholders.
We are currently working with Kinder Morgan to increase our respective
pipeline and processing capacity commitments to 600,000 MMBtu per day,
which will enable the JV to serve additional Eagle Ford Shale producers.”
Duane Kokinda, president of Kinder Morgan’s Texas Intrastate Pipelines
Group, said, “We are delighted to enter into this agreement with
Chesapeake for the remainder of the 375,000 MMBtu per day of capacity
currently committed to the joint venture, and we look forward to working
with Copano to expand the scope of the joint venture to handle
significant additional volumes from the Eagle Ford Shale play.”
Kinder Morgan and Copano will invest a total of approximately $175
million to construct 111 miles of pipeline facilities to serve Eagle
Ford Shale production from Chesapeake and from SM Energy Company
(NYSE:SM), with which the JV executed a gas services agreement in July
2010. Eagle Ford Gathering has 375,000 MMBtu per day of firm capacity on
Kinder Morgan’s intrastate pipeline from Laredo to Katy and 375,000
MMBtu per day of firm processing capacity 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 over $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 and 22,000 barrels per day of
fractionation 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: price volatility and market demand for natural gas and natural
gas liquids; the impact on volumes and resulting cash flow of
technological, economic and other uncertainties inherent in estimating
future production, 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;
higher construction costs or project delays due to inflation, limited
availability of required resources or the effects of numerous
environmental, legal or other uncertainties; general economic
conditions; and the effects of government regulations and policies.
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.
