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Gulf South Proposes Two Expansions Supporting Growing Texas Production

East and North Texas gas production growth has prompted Gulf South Pipeline to propose two complementary pipeline expansion projects to relieve existing capacity constraints. Gulf South is holding simultaneous open seasons on the two projects, which could be stand-alone projects or could be developed jointly. Both would create additional west-to-east firm transportation capacity and provide Gulf South additional flexibility in operating its system both now and in the future.

The East Texas Expansion Project would begin in the Carthage, TX, area and deliver up to 1 Bcf/d of gas to markets in North Louisiana, including connections with downstream pipelines such as Texas Gas at Lonewa, LA, and new proposed interconnects with Columbia Gulf, Tennessee and ANR in the Perryville, LA, area. The project would help relieve the capacity constraints that currently exist in East Texas. It would consist of 140 miles of 36-inch diameter pipeline looping, and 40 miles of 36-inch diameter pipeline replacement, compression and other ancillary facilities. The proposed in-service date for the East Texas project is June 2007.

The other project is a Mississippi expansion that would take gas from North Louisiana and deliver up to 1 Bcf/d to markets currently connected to Gulf South in Mississippi such as Transco Zone 4 and FGT Zone 3. It would provide an outlet for gas that is or will be constrained in and around Perryville. The project would consist of 40 miles of 36-inch or 42-inch diameter pipeline replacement and 46 miles of new pipeline construction. It is expected to be in service by August 2007.

In order to obtain firm transportation capacity on either or both projects without having contracts posted for competitive bid, potential shippers must participate in the open season and execute binding precedent agreements by March 31, Gulf South said in a bulletin board notice.

Shippers interested in the Mississippi project that desire to deliver gas to Texas Eastern at Kosciusko, MS, will need to specify during the open season the volumes to be delivered and the incremental rate they are willing to pay, the company added. Shippers interested in the Mississippi project also will be able to source gas from the East Texas expansion.

Gulf South said it currently is engaged in negotiations with several shippers that desire to become anchor shippers for the projects. To be an anchor shipper, a company has to have started negotiations on a binding precedent agreement by Jan. 31 for at least 100 MMcf/d of firm transportation capacity with a term that is not less than five years at rates acceptable to Gulf South. Anchor shippers also must have executed binding precedent agreements, including having received all necessary approvals, by Feb. 10. Capacity will be awarded first to anchor shippers and will not be subject to proration. Firm transportation for non-anchor shippers will be awarded on first-come, first-served basis.

For further details contact Brian Cody at (713) 544-7365 or Brian.Cody@gulfsouthpl.com or David Lytle at (713) 544-6081 or at David.Lytle@gulfsouthpl.com

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