XTO to increase Texas pipeline capacity

XTO Energy said June 4 that it has executed a long-term agreement with Energy Transfer Co., a private company based in Dallas, Texas, to deliver natural gas into Energy Transfer’s new pipeline system on which construction activity has begun.

Beginning in mid-2004, XTO said, it has committed to deliver some 200 million cubic feet per day from East Texas production. The agreement runs through July 2012.

“Our development program in the prolific East Texas Freestone Trend continues to best expectations,” said Steffen Palko, XTO vice chairman and president. “In just over three years, gross production volumes have increased from about 20 to 310 MMcfd from 240 new wells drilled. These successful results are expanding our production projections and, in turn, our required infrastructure for the next decade.”

“With today’s inventory of 800 to 1,000 wells to drill in East Texas, we are acting to ensure the needed pipeline capacity,” said Keith Hutton, XTO executive vice president operations. “This agreement with Energy Transfer will provide another 200 MMcfd of natural gas transportation. When added to our existing 27-mile pipeline system, XTO will control transportation capacity of about 600 MMcfd by the end of 2004.”