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Midcontinent Express Clears Initial Environmental Hurdle at FERC

FERC Friday issued a favorable draft environmental review to Midcontinent Express Pipeline LLC for a proposed 500-mile pipeline that would give producers in the various shales in Texas, Arkansas and Oklahoma greater market access.

"The proposed project, with appropriate mitigation measures as recommended, would have limited adverse environmental impact," Federal Energy Regulatory Commission (FERC) staff concluded in the draft environmental impact state (DEIS) on the proposed $1.27 billion pipeline system [CP08-6]. Midcontinent Express still must win final environmental approval before the Federal Energy Regulatory Commission considers it for a certificate.

The project would 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 much-anticipated project, which was filed at FERC in October, is in response to robust natural gas production in Oklahoma and North Texas. It would help move gas eastward to markets in Florida and the Northeast (see NGI, Oct. 15, 2007). The proposed pipeline also is 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 last fall already had binding commitments of approximately 1 Bcf/d from creditworthy shippers for long-term transportation capacity, according to Midcontinent Express, a 50/50 joint venture of Kinder Morgan Energy Partners LP (KMP) and Energy Transfer Partners LLC. KMP will manage the construction of the project and operate the pipeline.

The pipeline would consist of approximately 265 miles of 42-inch diameter, 196 miles of 36-inch diameter and 41 miles of 30-inch diameter pipe, as well as a four-mile lateral in Louisiana, 111,720 horsepower of compression and up to 13 receipt/delivery interconnections. The delivery interconnections would provide access to numerous downstream markets, including those served by Natural Gas Pipeline Co. of America, Transco, Texas Eastern Transmission, Tennessee Gas Pipeline, Columbia Gulf Transmission, Texas Gas Transmission, Southern Natural, Destin Pipeline and ANR Pipeline.

Construction on the pipeline project, which would have an initial capacity of 1.4 Bcf/d and travel from Oklahoma to Alabama, is targeted to be in service in February 2009, according to the DEIS.

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