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Midcontinent Express Phase I Service Begins

Midcontinent Express Pipeline LLC (MEP) Phase I began interim service on 266 miles of 42-inch diameter pipeline from interconnects with Houston Pipe Line Co. and Natural Gas Pipeline Co. of America (NGPL) near Paris, TX, to an interconnect with the Columbia Gulf Pipeline near Delhi, LA, the pipeline said last Friday.

The capacity available to Columbia Gulf is 641,000 Dth/d. MEP will also have primary firm deliveries available to NGPL in Atlanta, TX. It is anticipated that deliveries to Texas Gas and ANR Pipeline near Perryville, LA, will be available by Friday (May 1), and receipts from Enogex Bennington Bryan and deliveries to CenterPoint Energy Gas Transmission near Delhi will be available during the first half of May.

"The beginning of interim service on MEP is a huge step towards strengthening the nation's energy infrastructure by providing clean-burning natural gas from the Barnett Shale and Bossier Sands in Texas, the Fayetteville Shale in Arkansas and the Woodford Shale in Oklahoma to Midwest, Northeast, Mid-Atlantic and Southeast markets," said Steve Kean, president of Kinder Morgan's natural gas pipelines.

Newfield Exploration Co. is one Woodford producer counting on MEP's completion to lift gas prices in the region (see related story).

In February MEP filed an application at FERC for a 300,000 MMcf/d expansion to boost the main segment of MEP's Zone 1 from the previously sold out capacity of 1.5 Bcf/d to 1.8 Bcf/d by increasing compression at stations in Lamar County, TX; Cass County, TX, and Hinds County, MS (see NGI, Feb. 16).

Bentek Energy LLC said in a recent report that with Gulf of Mexico region production continuing to grow and expansion projects such as Gulf Crossing and MEP relieving interregional capacity constraints, Gulf prices are projected to weaken relative to other U.S. supply basins and Northeast markets. "This is expected to keep Northeast basis spreads at or above variable transportation costs from the Gulf even after REX-East brings 1.8 Bcf/d of new capacity into the Ohio Valley," Bentek said (see NGI, March 23).

Kinder Morgan Energy Partners and Energy Transfer Partners each own a 45% interest in MEP. MarkWest Pioneer LLC, a subsidiary of MarkWest Energy Partners LP, last year entered into an option agreement to acquire 10% of the equity of MEP after construction is completed and it is placed into service (see NGI, Feb. 4, 2008).

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