NGI All News Access / NGI The Weekly Gas Market Report

Tengasco Pipe Begins Phase Two

Tengasco Pipe Begins Phase Two

Phase Two of Tengasco Inc.'s pipeline system is now under construction following permitting by the Tennessee Department of Transportation. The 28-mile mile project will complete the 60-mile system, which ties Tengasco's Swan Creek gas field into end-user markets in Eastern Tennessee. The pipeline is the only intrastate gas carrier in Tennessee.

Phase Two follows State Highway 11-W from Rogersville, to the Eastman Chemical facility in Kingsport. Tengasco has signed a 20-year contract with Eastman Chemical for a minimum of 10 MMcf/d. The contract, which is estimated to generate over $200 million of revenues during its term, will be serviced by the completion of the Phase Two pipeline segment. The project is estimated to cost $6 million. Completion is expected by Oct. 1.

"Within the coming six months we will begin bringing to market our substantial base of 104.6 Bcfe in proved reserves in the Swan Creek field," said Mike Ratliff, Tengasco CEO. "We believe the Swan Creek field will ultimately produce more than 1 Tcf of natural gas. Our current deliverability from the Swan Creek field is 25 MMcf/d. Initially these sales will be to fulfill our contract obligations with Eastman Chemical."

Tengasco is finding gas in its Swan Creek Gas Field at depths considered deep for the Appalachian Basin (5,000 feet) and at costs that are a fraction of those spent by producers in Texas and Oklahoma, Michael McCown, chief geologist for the Knoxville, TN-based company, said in February (see NGI Feb. 14).

In January Tengasco Pipeline signed a franchise agreement with the Powell Valley Utility District to install and operate gas utility services for residential, commercial and industrial users in Hancock County, TN (see NGI Jan. 31).

Joe Fisher, Houston

©Copyright 2000 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.