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New Gas Supplies Put Spotlight on Perryville, LA, Infrastructure

As new supplies of gas from the Barnett Shale and Bossier Sands in Texas, the Haynesville Shale in northwest Louisiana, the Woodford Shale in southeastern Oklahoma and the Fayetteville Shale in northeast Arkansas continue to ramp up, Perryville, located in northeastern Louisiana, finds itself ideally situated as a gathering place to store and move the gas to markets in the Midwest, Northeast and Southeast.

New infrastructure is necessary to handle the load. Just last week, CenterPoint Energy subsidiary CenterPoint Energy Gas Transmission Co. (CEGT) launched some nonbinding pipeline open seasons and Cardinal Gas Storage Partners LLC subsidiary Perryville Gas Storage LLC launched a nonbinding storage open season.

To keep up with increased production volumes coming out of the numerous unconventional plays in Texas and Louisiana, CEGT is holding a nonbinding 31-day open season to gauge market interest in an additional expansion of its 1.5 Bcf/d, 42-inch Carthage to Perryville (Line CP) pipeline through looping and additional compression.

Line CP extends 172 miles from the Carthage Hub in East Texas to the Perryville Hub in northeast Louisiana. CEGT said it has successfully completed the first three phases of Line CP and continues to receive expressions of interest in incremental capacity.

"Natural gas production volumes from the Bossier Sands and Barnett Shale in North and East Texas continue to exceed previous forecasts," said Cy Zebot, senior vice president of CEGT. "As the Haynesville Shale further develops, Line CP is well positioned to expeditiously get these supplies to the marketplace. Assuming adequate expressions of interest are received, we're prepared to execute binding precedent agreements and seek necessary governmental authorizations in anticipation of placing the first stages of this proposed project in service as early as the winter of 2009."

CEGT noted that gas production in East Texas remains robust, in addition to the rapidly developing Haynesville Shale of eastern Texas and northwestern Louisiana. An additional expansion of Line CP would provide these incremental supplies access to the interstate pipelines serving the Midwest and Northeast through CEGT's Perryville Hub, as well as access to markets in the Southeast through the Southeast Supply Header. Additionally, CEGT's Perryville Hub will provide direct access to the recently announced Perryville Gas Storage project being developed near Delhi, LA.

CEGT anticipates that the increased incremental capacity on Line CP would be provided with additional compression and line looping. The specific facilities required will be a function of the location and volume level commitment of potential supply sources. The company said final pricing determinations will be based on the facility costs, the level of firm commitments and the amount of interest indicated in accessing interstate pipelines connected to CEGT's Perryville Hub. CEGT added that it will consider proposals of any term, but estimates that long-term commitments will be necessary to complete this project.

Written indications of interest should be received by CEGT by 5 p.m. CDT on July 28. For questions, contact Kevin Holder, senior director of Business Development and project manager at (713) 207-5166 or at More information is available on the CEGT website,

CEGT last week also launched a nonbinding, 31-day open season to gauge market interest in a new firm wheeling service designed to provide shipper access to existing excess receipt and delivery capacity, along with planned future expansions of such capacity, in the growing Perryville Hub area in northeast Louisiana.

CEGT, which has been offering wheeling service on an interruptible basis, said its new firm wheeling service would allow shippers to secure access on a firm basis to excess receipt and delivery point capacity on any of the 16 existing interstate pipeline facilities connected via the CEGT Perryville Hub. Additionally, CEGT is constructing five new interstate pipeline interconnects with recently announced pipeline expansions for Perryville Hub service as well as providing interconnects with proposed storage opportunities, capitalizing on the growing interest in storage projects associated with Perryville Hub service.

"The Perryville Hub is the fastest growing service for connecting supplies with markets throughout the country. In the future we could have over 9 Bcf/d of natural gas supply passing through the Perryville Hub area," said Zebot. "Given CEGT's unparalleled access to a substantial number of interstate pipelines and anticipated storage opportunities, the growth shown in the Perryville Hub, and the continuing volatility in the natural gas market, we feel that our new firm wheeling service will be well received as one of the innovative tools needed by the market. With acceptance of our new firm wheeling service by the FERC, we plan to have firm service in place by September 2008."

CEGT said the new firm wheeling service will utilize existing facilities as well as potential additions. The company said it has more than 5 Bcf/d of existing excess receipt and delivery capacity available to provide Perryville Hub services. In addition, CEGT expects more than 6 Bcf/d of new receipt and delivery capacity to be added in the future from planned pipeline expansion projects that will be able to access the Perryville Hub's services.

CEGT said it has received and accepted an order from the Federal Energy Regulatory Commission permitting it to add the new firm wheeling service to its menu of Perryville Hub services. CEGT invites interested shippers to offer both fixed rates, as well as "innovative, market-based pricing structures."

Written indications of interest should be received by CEGT by 5 p.m. CDT on July 25. For more information, contact John Fogg, director of off-system marketing, at (713) 207-5183 or

Earlier this month, Cardinal Gas Storage Partners acquired two storage development projects from CEGT, which included the Perryville Gas Storage project (see NGI, June 23). Last week, a subsidiary of Cardinal Gas announced a nonbinding open season for 15 Bcf of capacity at the site.

Commercial storage services for the first of two 7.5 Bcf working gas salt caverns are expected to commence in 2012. The facility is expected to provide 1,200 MMcf/d of peak deliverability and 600 MMcf/d of peak injection capability from the two caverns.

In addition to connecting to the Perryville Hub, the facility is also to have the ability to interconnect to several pipelines near the facility site as well as a number of additional pipelines at Delhi. Some of those pipelines include CenterPoint Line CP, the Southeast Supply Header, Columbia Gulf, Tennessee Gas Pipeline Line 100, ANR, Trunkline, Texas Gas, Gulf South, Gulf Crossing and the Mid-Continent Express.

The open season runs through July 18. A completed expression of interest form should be faxed to Jeff Ballew at (903) 983-6237 by 5 p.m. July 11. For information contact Ballew at, (903) 983-6229; or David Hayden at, (713) 350-6884.

Cardinal is a recently formed joint venture between Martin Resource Management Corp. and Energy Capital Partners LP. It is focused on the development, construction, operation and management of gas storage facilities throughout North America. Cardinal also owns Arcadia Gas Storage LLC in North Louisiana and is in the process of developing additional storage facilities in North America.

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