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CEGT, DEGT Consider New Gas Pipeline to Connect Perryville Hub to Gulfstream

To take advantage of growing natural gas production from the Barnett Shale and Bossier Sands projects, CenterPoint Energy Gas Transmission (CEGT) and Duke Energy Gas Transmission (DEGT) have signed a Memorandum of Understanding (MOU) to develop a new pipeline to connect CEGT's Perryville Hub in northeast Louisiana to the Gulfstream Natural Gas System, one of DEGT's partially owned affiliate pipelines. To assess market interest, an open season will be held in early December.

The proposed 250-mile pipeline's capacity would be between 700 MMcf/d and 1 Bcf/d, and it could be in service by early 2008, the companies said.

"The new pipeline would provide our Perryville Hub customers access to additional markets," said Cy Zebot, CEGT's chief commercial officer. "In addition to our current customers, it would provide additional markets for Barnett Shale and Bossier Sand gas producers taking capacity on our recently announced Carthage to Perryville project" (see Daily GPI, Oct. 26).

CEGT agreed in October to transport 600 MMcf/d of East and North Texas gas production for XTO Energy for 10 years on a new 168-mile pipeline between the Carthage Hub in East Texas and the Perryville Hub. The $375 million pipeline will have an initial design capacity of 1 Bcf/d and could be in service as early as the winter of 2006-2007.

Guy Buckley, DEGT's group vice president for Southeast transmission, said the new pipeline system would "provide an important link for natural gas supply to reach key Northeast markets in winter, and rapidly growing Southeast markets in summer."

Several other projects also are planned to transport gas out of East and North Texas, including one by Energy Transfer, Gulf South and Texas Gas (see Daily GPI, June 3), and a venture by Kinder Morgan and Crosstex (see Daily GPI, May 26).

CEGT is an indirect, wholly owned interstate gas pipeline subsidiary of CenterPoint Energy Inc., and DEGT is a subsidiary of Duke Energy Corp.

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