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
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