Southern Union Co. (SUG) plans to build a $235 million natural gas processing plant and associated facilities to expand midstream services for the Permian Basin in Texas.
As part of this Red Bluff Project, the natural-gas transporter will construct about 60 miles of pipeline to deliver up to 20,000 barrels per day of natural gas liquids into Lone Star NGL LLC's recently-announced Jackson County to Mont Belvieu, Texas, pipeline expansion, under a 15-year firm arrangement. The project is expected to be completed in mid-2013.
"With existing Permian Basin midstream infrastructure nearing capacity, Red Bluff provides long-term customer solutions for treating, processing and NGL take-away and significant earnings growth opportunities for our stockholders," said Chairman and Chief Executive George L. Lindemann.
Southern Union last month agreed to a cash-and-stock buyout from Energy Transfer Equity LP (ETE) valued at $5.7 billion at the time. But Williams Cos. (WMB) is in a bidding war, saying recent market volatility underscores the benefits of its $5.6 billion all-cash bid.
Southern Union said its second-quarter earnings fell 20% amid merger-related expenses, hedging impacts and higher costs for natural gas and other energy, though revenue rose 10%.
Source: The Wall Street Journal
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