Southern Union Announces Permian Basin Midstream Expansion

Southern Union Company SUG announced today that its Board of Directors has approved construction of the $235 million Red Bluff Project, a 200 MMcf/d natural gas processing plant and associated gathering, compression and treating facilities, through its midstream segment, Southern Union Gas Services. This action builds on an existing multi-phase midstream expansion developed as a response to producer needs in the Avalon Shale. The new facilities will enable SUGS to accommodate natural gas production from existing and future producer commitments in the rapidly expanding Avalon, Bone Spring and Wolfcamp plays of West Texas and Southeast New Mexico. As part of the project, SUGS will construct approximately 60 miles of pipeline to deliver up to 20,000 bpd of natural gas liquids into Lone Star NGL's recently-announced Permian-to-Mt. Belvieu pipeline expansion, under a 15-year firm arrangement. The project is expected to be completed in mid-2013.