In an effort to expand takeaway capacity from the Barnett Shale and Bossier Sand gas production plays in Texas, Energy Transfer Partners said its board has approved construction of an 85 mile 36-inch diameter pipeline from its Bethel gas storage facility in Anderson County, TX, to its 30-inch diameter Texoma Houston Pipe Line facility in Rusk County.
The $132 million project will include installation of several compressor stations totaling about 22,500 horsepower of compression. The project is the first of a multi-phase expansion intended to provide East and North Texas producers new market access.
There are significant pipeline capacity constraints out of the rapidly expanding and prolific producing areas that will be addressed by this ongoing construction project, the company said. The new pipeline is expected to be in service in 12 months with the additional lines completed over the course of the next 24 months.
In addition, this expansion will continue the integration of the Partnership's 36-inch diameter Katy Pipeline and the Southeast Texas Pipeline assets with the TUFCO system previously purchased in June 2004 and the Houston Pipe Line system and related storage facilities that Energy Transfer bought from American Electric Power Corp. (AEP) in January 2005.
The new project will connect those pipeline systems and provide producers with seamless transportation service from every significant natural gas producing area in Texas to the major market hubs, as well as to Houston Ship Channel markets and every major Texas city including Dallas, Fort Worth, Austin, San Antonio, and Houston, the company said.
"We are excited about the rapidly expanding growth of the Barnett Shale and the Bossier Sand and continue to demonstrate our commitment to the producer community to expand pipeline outlets by offering firm access to premium markets in Texas and to many interstate pipelines," said Mackie McCrea, president of Energy Transfer's midstream division.
Energy Transfer said sufficient natural gas volumes have been committed by producers to provide the initial economic justification for the pipeline. Additional pipelines planned as part of the multi-phase expansion are expected to cost $270 million. The construction costs will be partially financed with internally generated funds.
Energy Transfer Partners is a publicly traded partnership owning 11,700 miles of gas pipelines with throughput of 7.2 Bcf/d. The company also is the fourth largest retail marketer of propane in the United States, serving more than 650,000 customers.
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