Crosstex Energy, L.P. (XTEX), connects the growing production domestic production of oil and gas to the downstream petrochemical companies, and also to the new centers of demand such as electricity-generation plants fueled by natural gas and refineries formerly supplied with imported oil, says Michael J. Garberding, Executive Vice President and CFO of Crosstex Energy, L.P.
“We’ve really seen a surge in U.S. energy production. For example, crude oil production is up about 16% year over year, natural gas production is up 26% over the last five years and NGL production is up 20% in the last five years. How do you successfully link this production increase to downstream demand? That’s what we’re really doing — linking that production to where the demand centers are,” Garberding said.
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Garberding says the production from the Bakken and the Utica will eventually be transported by pipeline rather than rail, which presents an opportunity for XTEX. He adds that NGL, a key growth business for the MLP, has seen large potential growth for petrochemical expansions along the Gulf Cost, where about 85% of the petrochemical infrastructure is located.
“When we think about the trends, both from supply and demand standpoints, we can help from a bottleneck perspective to get the product from the supply source — which, again, is in different places than in the past — to the demand center. For instance, how do you move crude oil from the Bakken down to the Gulf Coast? Or how do you move crude oil condensate from Ohio to a demand center potentially in Canada? Crosstex is fulfilling that role by having the infrastructure in those areas and giving the producers and the end users that optionality to get the product to market,” Garberding said.
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