Regency Energy Partners' Haynesville Expansion Project and Red River Lateral are now in service, the partnership and its partners said last Wednesday. The projects increase capacity of the Regency Intrastate Gas System (RIGS) to approximately 2.1 Bcf/d by the addition of about 1.2 Bcf/d of transport capability.
Regency's partners in the joint venture projects are Alinda Capital Partners LLC and an affiliate of GE Energy Financial Services. Construction was completed last month (see NGI, Jan. 18).
Rocco Canonica, an analyst with Bentek Energy, said his firm expects Regency production receipts out of the Haynesville Shale to ramp up following bidweek for February, during which producers schedule baseload flows for the entire month. "Bentek expects U.S. dry gas production to increase to 57.2 Bcf/d in March from 55.2 Bcf/d month-to-date in January," Canonica said. "The Regency expansions are expected to contribute to these production gains.
"U.S. production has nearly recovered from the losses related to freeze-offs in early January and in December. Cold weather has had a significant impact on gas supply this winter, but imports from Canada and LNG [liquefied natural gas] have stepped up to fill some of the supply gap."
"The Haynesville Expansion Project was specifically constructed to provide much-needed takeaway capacity for Haynesville Shale gas in North Louisiana and is the first major project to be placed in service in the region," said Regency CEO Byron Kelley. "We continue to see impressive drilling results in the Haynesville Shale, and the joint venture is evaluating additional expansions to RIGS, which we believe is well positioned for future growth in the region."
The 1.1 Bcf/d Haynesville Expansion consists of the 25-mile, 36-inch diameter Bienville Loop; the 21-mile, 36-inch diameter Elm Grove Pipeline; and the 75-mile, 42-inch diameter Winnsboro Loop; as well as 14,200 hp of compression at the Elm Grove and Haughton stations.
The Red River Lateral adds approximately 12.5 miles of 36-inch diameter pipeline and approximately 100,000 MMBtu/d of capacity to the system (see NGI, Sept. 21, 2009).
The projects are underwritten by firm transportation agreements with 10-year terms, and approximately 85% of projected revenues are expected to come from reservation fees, Regency said. RIGS is to begin charging shippers for reservation on Monday (Feb. 1).
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