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Barnett Boom Drives Falcon's Storage Open Season

April 7, 2008
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NorTex Gas Storage Co. LLC, a subsidiary of Falcon Gas Storage Co. Inc. last week said all of the capacity for firm storage and transportation services at its Hill-Lake and Worsham-Steed gas storage facilities offered during a binding open season has been fully subscribed.

The NorTex open season started on Feb. 19 and ended March 7 (see NGI, Feb. 25).

"We offered 4 Bcf of storage capacity in the open season and received firm bids for 16 Bcf," said Falcon Chief Commercial Officer Jeff Foutch. "Given the high demand for storage capacity in the Barnett Shale area of North Texas, we made an additional 1 Bcf available that we originally had planned to hold back. Bids for firm transportation capacity on our Worsham-Steed Pipeline exceeded what we expected. Based on this overwhelming response for storage and transportation capacity, we are evaluating expansions of both our gas storage and pipeline assets in North Texas."

Contracts for these firm services were to begin April 1 and include 5 Bcf of working gas capacity and related gas transportation via Falcon's recently completed 60-mile, 24-inch diameter high-pressure Worsham-Steed Pipeline. Traversing Jack, Parker and Hood counties, the Worsham-Steed Pipeline moves Barnett Shale production to export markets through interconnects with the Atmos Line-X and Enterprise/Energy Transfer North Texas Pipelines.

Customers also fully subscribed for Falcon's load-following and hourly balancing (LFHB) service, a firm hourly service tailored to the volatile gas-fired power generation market in Texas, managing 24-hour ratable gas flows with hourly peak and off-peak power dispatch. Falcon's LFHB service allows shippers to inject gas into Falcon's storage facilities for any hourly off-peak period and withdraw gas during peak power demand periods for any hourly period.

Production from the Barnett Shale has been booming for some time now. Devon Energy Corp. said recently it is close to producing about 1 Bcfe/d from the play (see NGI, March 31a). Production growth from the Barnett and other shale plays in the region, as well as future imports of liquefied natural gas to Gulf Coast terminals, all are factors contributing to predicted bottlenecks in transportation away from the Gulf Coast region (see NGI, March 31b).

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