SM Energy (NYSE:SM) and Eagle Ford Gathering, a joint venture between Copano Energy (Nasdaq:CPNO) and Kinder Morgan Energy Partners, L.P. (NYSE:KMP), have entered a 10-year gas services agreement, where SM Energy will produce 200,000 million British thermal units per day of Eagle Ford Shale natural gas.
For Eagle Ford's part of the deal, they'll offer gathering, transportation and processing services.
Eagle will build a pipeline for the purpose of collecting and transporting gas, which will flow through Kinder Morgan’s Laredo-to-Katy pipeline to Copano’s Houston Central plant. There the gas will be processed.
For the first phase of the project, Eagle will spend about $137 million, while SM Energy won't have to spend any upfront capital, as it is a fee-based deal on their part.
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