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Gulf South, Texas Gas, Energy Transfer Propose Two New TX Pipelines

Boardwalk Pipelines LLC subsidiaries Gulf South Pipeline Co. LP and Texas Gas Transmission LLC, along with Energy Transfer Partners LP, said late Thursday they are jointly developing two independently owned and operated natural gas pipeline systems that would interconnect near Carthage, TX to integrate with existing systems in East Texas -- a region where the Bossier Sand and Barnett Shale gas plays are producing at high speed.

The joint development of the new pipes is subject to completion of a multiyear development process, including obtaining customer commitments, regulatory approvals and definitive agreements, the companies said. The costs, and a proposed in-service date were not disclosed.

Under the proposal, Gulf South would construct a 36-inch interstate pipe, with an initial capacity of 1 Bcf/d that would originate in Carthage, where it would then interconnect with Energy Transfer's pipes. The pipeline then be connected with Gulf South's existing mainline system in Louisiana and Mississippi and with Texas Gas' mainlines in Louisiana. In addition to its previously announced projects, Energy Transfer also wants to develop a 36-inch pipeline from its Texoma pipeline east to Carthage.

The new projects, in combination with Energy Transfer's 11,700-mile intrastate pipeline system, would access all the major supply basins in Texas. Gulf South and Energy Transfer also provide transportation to several market centers on Gulf South, including Perryville, LA and the Henry Hub, Midwest markets on Texas Gas, and industrial and pipe markets located east of the Mississippi River, including the Baton Rouge to New Orleans corridor, Florida Gas Transmission Zone 3, Transco Zone 4 and Texas Eastern M1.

"Our previously announced multiphase pipeline expansion was designed to provide producers with the needed pipeline capacity out of Central and East Texas to our Texoma pipeline, which interconnects certain interstate pipelines," said Roy Patton, senior vice president, Energy Transfer. "This project enhances our expansion through the development of a pipeline from Texoma to Carthage, accessing the new Gulf South interstate pipeline and the additional markets Gulf South provides."

The proposed projects are in competition with one announced by Kinder Morgan Energy Partners LP (KMP) in May (see NGI, May 30). KMP is proposing a 700,000 Dth/d interstate pipeline that would transport gas production from the Bossier Sand and Barnett Shale exploration plays, as well as imports from new liquefied natural gas terminals along the Gulf Coast to pipelines in Louisiana.

KMP is holding an open season through June 16 for the proposed pipe, which would originate near Beckville, TX and extend 38 miles to Stonewall, LA. The company said it would file an application with the Federal Energy Regulatory Commission and build the pipe with an in-service date in 2Q2007.

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