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Growing North Texas Production Spawns Another Interstate

Burgeoning production out of the Barnett Shale and the Bossier Sands has spawned plans for another interstate pipeline that would carry 1 Bcf/d through Oklahoma and Arkansas and interconnect with Texas Gas Transmission LLC in Cohoma County, MS.

Dallas-based Boardwalk Pipeline Partners LP, Energy Transfer Partners LP and ONEOK Partners LP plan to form a joint venture to construct the pipeline, which will be about 560 miles long, with a diameter yet to be determined but likely between 36 and 42 inches.

Greg Brazaitis, director of business development for Energy Transfer, told NGI, that in talking with producers for its current project, the company learned that production growth in the region, expected to peak in 2009-2010, more than justifies another pipeline project.

"Currently, we're in the process of building a 42-inch pipe out of the Barnett Shale and over into Carthage [TX]," he said. "We've been visiting with our producers. Our feeling is that there's substantively a great amount of gas more than what we can actually move in the 42-inch. In the aggregate. We have a lot of gas coming in, not only from the Barnett Shale but also from the Bossier Sands that we're planning on putting that into the 42-inch project that we've got. As we begin to move into some of the years that our producers are telling us when production is going to peak out of those areas, the current production anyway, it looks like we're a little short on capacity and so we've been thinking of ways that we could take that gas and perhaps move it into an area that's even more attractive than the places we're going to today."

Last month Energy Transfer said it would go ahead with a $360 million expansion, including the addition of 157 miles of 36-inch pipeline and 92,700 horsepower of compression to its proposed 42-inch pipeline in East and North Texas (see NGI, May 8). The 950 MMcf/d expansion will bring the system's capacity to 2.3 Bcf/d and will bring the total construction cost of the pipeline system to $895 million. The latest expansion is expected to be in service in August 2007.

Brazaitis said the company will go out with an open season for its new project by the end of June. The pipeline is expected to cost around $1 billion, depending on diameter and compression. It could be telescoped or it could be 42 inches all the way, Brazaitis said. Right now the only pipeline interconnect planned is with Boardwalk's Texas Gas, but there could be others, Brazaitis said. The partners want to hook up as many producers as possible. He said that if producers don't step up and take capacity on the line, the partners likely will themselves. "We feel that there's enough volume there that we could take it out ourselves."

With long lead times for steel and pipeline materials, Brazaitis said now is the time to move forward with a project intended to capture growing production in the region.

Boardwalk brings to the project access to numerous markets in the Midwest, Northeast and Southeast through interconnects on Texas Gas and Gulf South. Energy Transfer and ONEOK have extensive intrastate pipelines and gathering assets in Texas and Oklahoma.

The parties are also in discussions to commit to subscribing for substantial capacity in support of the project.

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