Copano Energy, L.L.C. (Nasdaq: CPNO) today announced execution of
agreements increasing Copano's capability to handle natural gas liquids
(NGLs) associated with growing natural gas volumes from the Eagle Ford
Shale. Copano has entered into a long-term fractionation and product
sales agreement with Formosa Hydrocarbons Company, Inc. and, to
facilitate deliveries of mixed NGLs to Formosa, Copano has formed a
50/50 joint venture with a subsidiary of Energy Transfer Partners to
construct, own and operate a 12-inch NGL pipeline ("Liberty Pipeline").
The Liberty Pipeline will extend approximately 83 miles, from Copano's
Houston Central Complex in Colorado County, Texas, first to Formosa's
leased NGL product storage facility in Matagorda County, Texas and then
to Formosa's petrochemical facility in Calhoun County, Texas.
The agreement provides Copano with up to 37,500 barrels per day of firm
fractionation services beginning in the first quarter of 2013 for a term
of 15 years. The agreement also provides that Formosa will purchase the
resulting NGL products and make product storage available to Copano for
operational reliability. Following the completion of Liberty Pipeline,
which is expected by the summer of 2011, and until additional facility
improvements at Formosa are complete, Copano will have access to a
minimum of 5,000 barrels per day of existing Formosa fractionation
capacity, as well as additional capacity on a "space available" basis.
Liberty Pipeline will have initial capacity of 75,000 barrels per day,
which will be committed to Copano and Energy Transfer (50% each) under
firm throughput agreements. Copano and Energy Transfer will together
invest approximately $52 million for the pipeline and related
facilities. A detailed map of Liberty Pipeline is included with this
press release on the Investor Relations page of Copano's website.
"We look forward to a long-term relationship with Formosa and to working
with Energy Transfer on the Liberty Pipeline project," said R.Bruce
Northcutt, President and Chief Executive Officer of Copano Energy. "The
Formosa agreement and Liberty Pipeline, together with our other recently
announced projects, are important steps in executing Copano's overall
Eagle Ford Shale strategy and will increase our total NGL handling
capability to over 80,000 barrels per day. These developments provide an
additional market for NGLs extracted at our Houston Central Complex and
help support Formosa's fractionation, storage, and olefins production
operations."
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 http://www.copanoenergy.com/.
This press release includes "forward-looking statements," as defined by
the Securities and Exchange Commission. Statements that address
activities or events that Copano believes will or may occur in the
future are forward-looking statements. These statements include, but are
not limited to, statements about future producer activity and Copano's
total distributable cash flow and distribution coverage. These
statements are based on management's experience and perception of
historical trends, current conditions, expected future developments and
other factors management believes are reasonable. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements include the following risks and
uncertainties, many of which are beyond Copano's control: price
volatility and market demand for natural gas and natural gas liquids;
Copano's ability to continue to obtain new sources of natural gas supply
and retain its key customers; 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, the
availability of downstream transportation systems and other facilities
for natural gas and NGLs, and higher construction costs or project
delays due to inflation, limited availability of required resources or
the effects of environmental, legal or other uncertainties; general
economic conditions; the effects of government regulations and policies;
and other financial, operational and legal risks and uncertainties
detailed from time to time in Copano's filings with the Securities and
Exchange Commission.
