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East Tennessee Gives Appalachian Producers New Market Access

Providing a new outlet for Appalachian Basin gas production, Duke Energy Gas Transmission's (DEGT) East Tennessee Natural Gas LLC (ETNG) placed into service its 32-mile Jewell Ridge pipeline project, which will transport up to 235,000 Dth/d of production from CNX Gas Corp. and other Appalachian natural gas producers to customers in the growing southeastern and Mid Atlantic markets.

"In Virginia, CNX Gas has proved reserves of 1,095 Bcf and net unproved reserves of 637 Bcf. Jewell Ridge provides an additional transportation outlet for this valuable resource," said Roland Campanelli, CNX's vice president of marketing. CNX Gas has entered into a 15-year transportation agreement with ETNG for firm transportation of 197,500 Dth/d on the Jewell Ridge Pipeline.

The 20-inch diameter lateral will move gas into the ETNG system from Appalachian producers and will make that supply available for delivery to ETNG customers and to interconnections with Williams' Transcontinental Gas Pipe Line at Cascade Creek, NC.

"This new pipeline provides Appalachian producers a way to bring a new supply source to a high-growth market that has traditionally relied on the Gulf Coast basin," said DEGT's Guy Buckley, group vice president of Southeast supply and storage.

The project utilized the Federal Energy Regulatory Commission's (FERC) pre-filing process, which allows for early involvement and input from landowners, environmental agencies and other stakeholders in the pipeline design process. After an extensive pre-filing process, the project application was approved by FERC in only five months, allowing DEGT to bring this source of incremental supply to the natural gas grid in time for the 2006-2007 winter season.

The Jewell Ridge project is the latest expansion of the ETNG system. Since DEGT's acquisition of ETNG in 2000, the company has grown its market delivery capability by 85% through system expansion, supply and storage development and acquisition.

CNX said that with the initiation of service on Jewell Ridge, it will begin a financial and strategic assessment of its Cardinal States Gathering system with the goal of maximizing shareholder value. CNX Gas will continue to provide gathering services on Cardinal States to third parties on a nondiscriminatory basis, subject to available capacity.

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