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FERC OKs Further Expansion of Carthage-to-Perryville Pipeline

FERC Monday issued a certificate to CenterPoint Energy Gas Transmission allowing it to further expand its Carthage-to-Perryville pipeline to accommodate the need for additional takeaway capacity from the Haynesville shale play in northwest Louisiana and East Texas.

The Phase IV expansion proposes to increase capacity on the Carthage-to-Perryville line by approximately 274,000 Dth/d to a total of about 1.87 Bcf/d. The expanded capacity would be used to deliver additional Haynesville shale gas supplies from Carthage, TX, to pipelines at the Perryville Hub in northeast Louisiana.

The first three expansions of the 172-mile Carthage-to-Perryville line, which went into operation in May 2007, were completed in 2007 and 2008, raising the capacity of the line to 1.55 Bcf/d.

In the Phase IV project, CenterPoint proposes to install an additional 15,000 hp turbine-driven compressor unit at both the Westdale and Vernon compressor stations located in Red River and Jackson parishes, LA, respectively. The project is targeted to go into service in April 2010 (see Daily GPI, March 19).

CenterPoint said it has executed a precedent agreement with Chesapeake Energy Corp. for 230,000-274,000 Dth/d of the proposed design capacity of the project, or approximately 84%. The company said it is negotiating with several shippers for the remaining capacity.

"We find no adverse impacts on existing pipelines in the market or their captive customers. Further, CenterPoint's proposed expansion facilities are located within its existing compressor station yards. Therefore impacts on adjacent landowners should be minimal. Accordingly...we find that the proposed Phase IV expansion...is required by the public convenience and necessity," the FERC order said [CP09-29].

FERC granted CenterPoint a presumption of rolled-in rate treatment for the cost of the Phase IV expansion in the company's next Section 4 rate proceeding, absent significant or material changes in circumstances. The cost of the proposed expansion is pegged at $68 million.

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