Kinder Morgan and Copano have entered into formal agreements for Eagle Ford Gathering, a 50/50 joint venture to provide gathering, transportation and processing services to natural gas producers in the Eagle Ford Shale resource play in South Texas. The companies previously announced a letter of intent for the joint venture on Nov. 13, 2009.

"This project builds on the long-standing partnership between Copano and Kinder Morgan to capitalize on the strong and growing demand in South Texas," said Bruce Northcutt, Copano Energy's president and chief executive officer. "This new joint venture will provide producers in the western Eagle Ford Shale a new, fully integrated midstream alternative for their gathering, transportation, processing and fractionation needs, including access to multiple residue gas markets."

"Kinder Morgan is happy to be expanding its commercial alliance with Copano and looks forward to providing producers a timely solution for their growing Eagle Ford gas volumes through the new joint venture," said Duane Kokinda, president of Kinder Morgan's Texas Intrastate Gas Pipelines.

Due to the high level of interest expressed by producers, Kinder Morgan and Copano have each increased their committed capacity from 150,000 to 375,000 MMBtu per day to Eagle Ford Gathering for transportation on Kinder Morgan's Laredo-to-Katy pipeline and processing at Copano's Houston Central processing plant. Additionally, the joint venture expects the first phase of construction to significantly extend beyond the original 22 miles previously announced.

In connection with the execution of the joint venture agreements, Copano and Kinder Morgan also amended and extended their existing straddle processing agreement and transportation agreement through the end of 2024. Representatives of Eagle Ford Gathering have been in negotiations with multiple producers regarding potential contracts for gathering, transportation and processing services. Copano will serve as operator and managing member of Eagle Ford Gathering.

Tags: Copano Energy, Kinder Morgan Energy Partners