Cheniere Energy Partners LP is holding a nonbinding open season for capacity on a major pipeline project that would link markets in the Southeast with incremental supplies from existing and new liquefied natural gas (LNG) terminals in and around Louisiana, the company said. The open season began last Tuesday and runs through Jan. 15.

The Louisiana Natural Gas Header project calls for the construction of approximately 330 miles of 42-inch diameter and 36-inch diameter pipe extending from a point in Beauregard Parish near De Quincy, LA, to an interconnection with the Florida Gas Transmission pipeline in Mobile County, AL. Houston-based Cheniere Energy said it expects to receive approval from the Federal Energy Regulatory Commission by mid-year 2009, with service anticipated by June 30, 2010.

The proposed 1.05 MMDth/d pipeline would have the potential to interconnect with pipelines accessing supplies from multiple LNG regasification facilities, including the Sabine Pass LNG, Trunkline LNG, Cameron LNG and Golden Pass LNG terminals, the company said. Cheniere Energy's Sabine Pass LNG terminal in Cameron Parish, LA, is scheduled to begin operations in the second quarter of 2008.

At full utilization, natural gas supplies from these four terminals could equal more than 15% of U.S. gas demand, it noted. Even at a modest utilization rate of 25%, Cheniere Energy said the terminals would potentially account for 2.5 Bcf/d of incremental gas supply and nearly 5% of domestic demand.

In addition to incremental LNG supply, Cheniere Energy said the Louisiana Natural Gas Header would cross existing pipelines with transportation capacity of more than 15 Bcf/d, providing shippers with access to the traditional onshore and offshore supply sources situated in the West Louisiana, East Louisiana and Mobile Bay production areas, including the recently developed 1 Bcf/d Independence Hub.

"By 2010, nearly 10 Bcf/d of LNG regasification capacity will be placed into service in southwest Louisiana and neighboring southeast Texas. Combining new incremental supply with traditional production-area access, the Louisiana Natural Gas Header will offer shippers supply diversity unlike any other greenfield project opportunity," said Cheniere President Stan Horton.

"This project would also alleviate increasing natural gas demand in the Southeast primarily driven by electricity generation," he said. The Gulf Coast and Southeast regions currently are powered by more than 70,000 MW of gas-fired generation, according to Cheniere Energy. Regional demand peaked seasonally during 2006 to more than 8 Bcf/d as a result of summer cooling needs. Florida alone has more than 25,000 MW of gas-fired generation and summer peak-day gas demand exceeds 3 Bcf/d, the company said.

Horton noted that over the next 10 years incremental gas needed to satisfy new electric generation in Florida alone is "very conservatively estimated at 1 Bcf/d."

For further information on the open season, call Randy Parr, vice president of marketing and business development, at (713) 375-5214, or Whit Scott, director of marketing operations and facility planning, at (713) 375-5613.

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