Shale Daily / NGI All News Access

DTE Unit Building Marcellus System for Southwestern

A subsidiary of DTE Energy Co. has signed a long-term agreement with a unit of Southwestern Energy Co. to build and operate a natural gas gathering system to carry output from the producer's Marcellus Shale operations to Millennium Pipeline Co. in Broome County, NY, and Tennessee Gas Pipeline Co. in Susquehanna County, PA.

DTE's Bluestone Gathering agreed to build the 37-mile project for Southwestern Energy Services Co., with start-up scheduled in 2Q2012. No financial details were disclosed. The gathering system would be composed of 16- and 20-inch diameter pipeline with initial capacity of more than 250,000 Dth/d to both the Millennium and Tennessee pipelines.

"Susquehanna County contains some of the most prolific gas wells in the Marcellus Shale," said Peter Cianci, president of DTE's Gas Storage and Pipeline Co. "Bluestone is part of our strategy to grow our natural gas business in the Northeast and provide a significant supply feed to the Millennium Pipeline."

Detroit-based DTE formed Bluestone last year and is the company's first gathering project outside of Michigan. DTE said it would spend more than $250 million over the next five years on both the Bluestone gathering lateral and infield gathering system.

In addition, Millennium, of which DTE owns 26.25%, has approved its first two expansions, which are scheduled begin service in late 2012 and late 2013. The expansions include two new compressor stations, which would increase Millennium's capacity to 825,000 Dth/d from 525,000 Dth/d.

Once the Millennium expansions are online, Bluestone would be able to deliver more than 1 Tcf/year of natural gas to the Millennium and Tennessee systems, "with room to expand as demand increases over time," DTE said.

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