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Fully Subscribed, Midcontinent Express Ponders Expansion

There's no room left in the pipe, according to the partner backers of the Midcontinent Express Pipeline LLC (MEP) project, who said last week their project is fully subscribed at its initial capacity of 1.4 Bcf/d.

"We are now poised to consider the expansion of our pipeline by up to an incremental 600 MMcf/d with additional compression to accommodate future production growth and shipper needs in the Barnett and Woodford shale formations, as well as other growing production areas in Oklahoma, Texas and Arkansas," said Scott Parker, president of Kinder Morgan's natural gas pipelines. Kinder Morgan Energy Partners LP and Energy Transfer Partners LP (ETP) are the partners behind MEP.

The companies recently announced that Newfield Exploration Mid-Continent Inc. had taken an additional 100,000 Dth/d of capacity in the project (see NGI, April 28). The majority of the MEP capacity is held by producers, although a couple of marketers have signed up for small volumes, a spokesman said.

The $1.3 billion MEP project would extend from southeastern Oklahoma across northeast Texas, northern Louisiana and central Mississippi to an interconnection with Transcontinental Gas Pipe Line (Transco) near Butler, AL. The 500-mile pipeline would consist of 266 miles of 42-inch diameter, 202 miles of 36-inch diameter and 39 miles of 30-inch diameter pipe, and have up to 13 receipt/delivery interconnections, providing access to markets served by the NGPL, Transco, Texas Eastern, Tennessee, Columbia Gulf, Texas Gas, Southern Natural, Destin and ANR pipelines. Subject to regulatory approvals, construction is scheduled to begin this summer and the pipeline is expected to be in service by March 2009. The Federal Energy Regulatory Commission (FERC) gave the project a favorable draft environmental review in February (see NGI, Feb. 11).

Both Kinder Morgan and ETP have pipelines upstream of MEP that would feed the project, noted Kinder Morgan spokesman Joe Hollier. "The ability for us to sell out [capacity] shows how strong the supply push is on this project [from] dramatic growth of supply from the shale plays," he told NGI last week.

He said the companies are continuing to look at developing gas storage along the MEP route, but there is nothing yet to announce. All pipe, valves and compressors needed for MEP have been purchased, Hollier said, and the construction contract is in the final stages of being awarded.

In January MarkWest Pioneer LLC, a subsidiary of MarkWest Energy Partners LP, said it had submitted a pre-filing application with FERC to build an interstate pipeline to give producers in the Woodford Shale the ability to interconnect with MEP in Bennington, OK (see NGI, Feb. 4). Denver-based MarkWest also said it had an option to acquire 10% of MEP's equity after the project is placed in service.

"The timing of the MEP project is aligned with the tremendous growth and development of these shale plays, and when coupled with Energy Transfer's pipeline systems provides our shippers significant flexibility and market diversification as they develop this rapidly emerging resource play," said Lee Hanse, ETP senior vice president.

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