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Fayetteville, Greenville Laterals Get FERC Approval

FERC last Thursday authorized Texas Gas Transmission Inc.'s compression expansion of its Fayetteville and Greenville laterals, which are under construction. The expansion responds to the need for increased takeaway capacity from the Fayetteville shale play in Arkansas.

The Fayetteville Shale Compression Project calls for the construction of the Bald Knob Compressor Station, which will consist of two 13,330 hp units, to increase the maximum capacity of the Fayetteville Lateral to 1.3 Bcf/d from the originally planned 841 MMcf/d.

Texas Gas, a subsidiary of Boardwalk Pipeline Partners LP, also proposes to build the Isola Compressor Station in Humphreys County, MS, which will consist of one 13,330 hp unit, to boost the maximum capacity of the Greenville Lateral in Mississippi to 1 Bcf/d from the initially planned 768 MMcf/d. It also proposes to modify its existing Greenville Compressor Station in Washington County, MS.

Texas Gas is seeking to begin construction by June 1 so it can place the compression facilities in service for the 2009-2010 winter heating season.

The proposed Fayetteville and Greenville laterals combined consist of about 262.6 miles of pipeline. In December, the header, or first 66 miles, of the Fayetteville Lateral was placed into service, and a portion of the Greenville Lateral became operational in January, according to the company (see NGI, Dec. 22, 2008). The Fayetteville Lateral would transport gas from the Fayetteville Shale play in Arkansas to the Texas Gas mainline near Lula, MS, while the Greenville Lateral would deliver gas from the Texas Gas mainline to various pipeline interconnects in Mississippi.

The two laterals will give Fayetteville Shale producers access to Midwest, Northeast and Southeast markets by way of several interstate gas pipelines. The Federal Energy Regulatory Commission (FERC) certificated the two laterals in May 2008 (see NGI, May 12, 2008).

Texas Gas has estimated the cost of the compression expansion at $162 million. FERC approved the pipeline's request for a pre-determination to roll the costs of the compression expansion into its incremental rates for service on the Fayetteville and Greenville laterals during its next Section 4 general rate case.

The Fayetteville Shale play could hold as much as 20 Tcf of shale gas, according to experts.

Chesapeake Energy Corp. and XTO Energy Inc., major Fayetteville shale producers, are the primary shippers supporting the laterals. Southwestern Energy Co., the first producer to tap the Fayetteville Shale in 2004, and Petrohawk Energy Corp. also have exercised options in their existing agreements to use a portion of the additional firm transportation capacity to be created by the compression expansion, according to Texas Gas.

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