Lone Star NGL, a joint venture between Energy Transfer Partners and Regency Energy, will build an approximately 530-mile natural gas liquids (NGL) pipeline that extends from Winkler County to a processing plant in Jackson County, Texas, US.
The company has also secured capacity on Energy Transfer’s recently announced NGL pipeline from Jackson County to Mont Belvieu, Texas.
The new pipeline, which is expected to be completed by the first quarter of 2013, will have a minimum capacity of about 130,000 barrels per day with the potential to upsize its capacity depending on ongoing negotiations.
The project currently has over 65% of the capacity subscribed with key producers and processors under 15-year agreements.
The pipeline is expected to cost about $700m, of which Energy Transfer will pay 70% and Regency will pay the remaining 30%.
Lone Star senior vice president Greg Bowles said the dramatic increase in drilling in the Permian Basin has highlighted the need for additional NGL takeaway capacity from west Texas.
"Lone Star is strategically positioned to provide this essential service to producers," Bowles said.