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FERC Approves Start-Up of Gulf South's Southeast Expansion

FERC staff on Friday gave Gulf South Pipeline Co. LP, a subsidiary of Boardwalk Pipeline Partners LP, the go-ahead to begin service on a major expansion that gives Texas, Oklahoma, Arkansas and Louisiana natural gas supplies greater access to Northeast, Florida and other Southeast markets.

The Southeast Expansion includes 111 miles of 42-inch diameter pipeline extending from the end of Gulf South's 1.7 Bcf/d East Texas-to-Mississippi Expansion at Harrisville in Simpson County, MS, which went into service in January, to a new interconnect with Transcontinental Gas Pipe Line in Choctaw County, AL (see NGI, Jan. 21; Oct. 8, 2007). The expansion facilities increase Gulf South's capacity by nearly 1.3 Bcf/d.

As part of the Southeast Expansion, the Federal Energy Regulatory Commission (FERC) approved Gulf South's request to lease 260 MMcf/d of capacity from Destin Pipeline. The lease agreement provides Gulf South with an option to increase the leased capacity to 700 MMcf/d. Gulf South says the leased capacity will enable it to provide access to Florida markets.

Gulf South, in justifying its project, said gas supplies from Texas, Oklahoma, Arkansas and Louisiana en route to the Perryville-Harrisville area currently have exceeded the capacity of existing pipelines to deliver those supplies further east. Absent additional pipe infrastructure from the Perryville-Harrisville area, it said that capacity constraints would only get worse as more gas production comes on line.

The Southeast Expansion facilities will provide new takeaway capacity for these new gas supplies to be delivered to major pipelines serving the Northeast, Florida and other Southeast areas, Gulf South said. Moreover, it noted that the project will allow markets that have historically relied on offshore production to access competitive onshore supplies to meet their gas needs.

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