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FERC OKs Texas Gas Laterals for Pre-Filing Process

FERC has approved Texas Gas Transmission LLC's request to begin an early review of its proposed Fayetteville and Greenville laterals under the agency's pre-filing process of the National Environmental Policy Act.

The Boardwalk Pipeline subsidiary, in asking to participate in the pre-filing process, said it planned to file in late June an application seeking FERC approval of the proposed laterals by May 3, 2008. Texas Gas has targeted the laterals for operation on Jan. 1, 2009.

The Fayetteville lateral would originate in Conway County, AR, and extend 167 miles to a connection with Texas Gas' mainline in Coahoma County, MS. It would be at least 36 inches in diameter and would have the capacity of about 1.1 Bcf/d. The Greenville lateral would originate at the Texas Gas mainline system near Greenville, MS, and extend 98 miles eastward to interconnections with various other interstate pipelines in the Kosciusko, MS, area. It is expected to have 750,000 Dth/d of transportation capacity. The cost of the two laterals has been pegged at $590 million.

Southwestern Energy Services Co., a subsidiary of Fayetteville shale gas producer Southwestern Energy, has signed a 10-year precedent agreement to be a "foundation shipper" on the two pipeline laterals.

The firm transportation agreements will enable Southwestern to transport up to 500,000 MMBtu/d on the Fayetteville lateral and up to 400,000 MMBtu/d on the Greenville lateral. Southwestern also will have the option to acquire up to 300,000 MMBtu/d of additional capacity on the Fayetteville lateral and 240,000 MMBtu/d of added capacity on the Greenville lateral.

The Fayetteville lateral will receive natural gas from multiple receipt points in the Fayetteville Shale play, which is on the Arkansas side of the Arkoma Basin. The gas will be delivered to new and existing markets served by Boardwalk's existing and planned pipelines, as well as to multiple interstate pipeline interconnects via the Greenville lateral.

Southwestern currently produces about 100 MMcf/d of gas from the Fayetteville Shale play in north-central Arkansas, but it expects production to grow rapidly in the coming years. The company holds 887,000 net acres in the play area.

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