Midcontinent Express Pipeline LLC (MEP) Monday asked FERC for the go-ahead to begin service at compressor and booster stations on a 507-mile pipeline that is slated for operation by Aug. 1. The pipeline, when operational, will provide more market access to shale gas producers in the South.
MEP, a joint venture of Kinder Morgan Energy Partners LP and Energy Transfer Partners LLC, is seeking authorization from the Federal Energy Regulatory Commission (FERC) to begin service at the Perryville Compressor Station in Union Parish, LA, by July 1, and at the Delhi Booster Station in Richland Parish, LA, by July 15 [CP08-6]. It said it "has completed all tie-ins and hydrotesting for both stations."
More than half of the $1.3 billion pipeline project -- from Bennington, OK, to Delhi -- is in interim service, said Kinder Morgan spokesman Joe Hollier. This leaves 207 miles of the line -- from Delhi to Alabama -- in various phases of construction. But "they're getting close to being done. We're getting there" and hope to be operational by Aug. 1, he said.
The much-anticipated project is in response to robust natural gas production from various shales in Texas, Arkansas and Oklahoma. It will help move gas eastward to markets in Florida and the Northeast. The pipe project is also seen as a way to keep supply and markets connected should Gulf of Mexico production go off-line in the event of a hurricane.
The pipeline will extend from southeast Oklahoma across northeast Texas, northern Louisiana and central Mississippi to an interconnection with the Transcontinental Gas Pipe Line (Transco) near Butler, AL. The pipeline will be capable of delivering 1.5 Bcf/d. MEP said it already has binding commitments for that capacity.
In February MEP filed an application at FERC for a 300,000 MMcf/d expansion of its mammoth pipeline project (see Daily GPI, Feb. 12). The expansion seeks to boost the main segment of MEP's Zone 1 from the previously sold out capacity of 1.5 Bcf/d to a total of 1.8 Bcf/d by increasing compression at stations in Lamar County, south of Paris, TX; Cass County, TX, and Hinds County, MS. MEP said it has awarded the expansion capacity to two shippers: Chesapeake Energy Marketing Inc. and National Fuel Marketing Co.
MEP's plans also include leasing up to 272,000 Dth/d of capacity on the Oklahoma intrastate system of Enogex Inc. The Commission approved a limited jurisdiction certificate authorizing Enogex to lease its capacity to MEP.
The pipeline facilities include 40 miles of 30-inch diameter pipe; 266 miles of 42-inch diameter pipe; and 201 miles of 36-inch diameter pipe, as well as two compressor stations in Lamar County, TX, and Union Parish and one booster station. Construction at the two stations in Cass and Hinds counties will start this fall, MEP said. They are targeted for operation in 2010.
MEP would have up to 13 receipt/delivery interconnections providing access to downstream markets, including those served by Natural Gas Pipeline Company of America, Transco, Texas Eastern Transmission, Tennessee Gas Pipeline, Columbia Gulf, Texas Gas Transmission, Southern Natural Gas, Destin Pipeline and ANR Pipeline.
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 Daily GPI, Jan. 29, 2008).
Denver-based MarkWest Energy Partners, along with ArcLight Capital Partners, are building a 50-mile interstate gas pipeline (Arkoma Connector) that would allow producers in the Woodford Shale area of Oklahoma to interconnect with the MEP and Gulf Crossing pipeline systems for delivery of their gas to eastern markets (see Daily GPI, May 5). The two lines would interconnect with the Arkoma Connector near Bennington. MarkWest previously said it planned to complete the Arkoma Connector in May. However the status of the project could not be immediately determined.
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