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ConocoPhillips Inks Deal to Deliver Rockies Gas Eastward

Houston-based Spectra Energy has signed a transportation agreement with ConocoPhillips to deliver up to 395 MMcf/d of Rocky Mountain natural gas from Clarington, OH, the eventual endpoint of the Rockies Express Pipeline (REX), to the Northeast by November 2010, the company said last Wednesday. Terms of the agreement with ConocoPhillips, one of the sponsors of REX, were not disclosed.

To accommodate the delivery of the Rockies gas eastward, Spectra Energy plans to expand its Texas Eastern Transmission (Tetco) pipeline system. The project, called the Texas Eastern Market-Area Crossing (TEMAX) expansion, calls for the construction of approximately 33 miles of pipeline from Tetco's mainline in Marietta, PA, to Transcontinental Gas Pipe Line's Station 195 near Delta, PA.

The company also plans to replace compressors with more efficient units at its existing compressor stations and add minimal pipeline loop adjacent to its existing corridor. The TEMAX project is expected to cost more than $500 million, according to Spectra Energy.

Tetco, one of the largest interstate gas pipelines in the United States, extends from the Gulf of Mexico to Northeast markets. It has the capacity to transport up to 6.2 Bcf/d, according to Spectra Energy.

REX-West entered service last Tuesday, and the eastern segment of the huge pipeline project, REX-East, is expected to go into operation in June 2009 (see related story).

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