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Energy Transfer Expanding Haynesville's Tiger Project

Dallas-based Energy Transfer Partners LP is planning to expand its proposed Tiger Pipeline and is acquiring gathering and treating assets to connect to the system before it's even built. The growth is inspired by the Haynesville Shale of North Louisiana and East Texas.

The partnership has made a binding, 10-year agreement with the expansion's foundation shipper for 400 MMcf/d of capacity, bringing the pipeline's long-term contractual commitments to 2.4 Bcf/d. Energy Transfer said it will launch a binding open season later in February to solicit additional interest in the expansion. Ultimate capacity will be based upon producer response.

"This long-term commitment, coupled with additional interest from other producers in the area, reinforces the need for this expansion project," said Lee Hanse, senior vice president of Energy Transfer's interstate division.

Energy Transfer also has agreed to buy gas gathering and treating assets in the Haynesville Shale from Tristate Midstream LP, a portfolio company of Dallas-based Energy Spectrum. The partnership is acquiring Tristate North Louisiana Midstream LLC and TSM Treating LLC, which combined own a 120-mile gathering system in Red River and Bienville parishes in Louisiana with a capacity of 275 MMcf/d, and natural gas treating facilities with approximately 480 MMcf/d of capacity. Closing is subject to regulatory approval.

"These Tristate assets, which include significant long-term acreage dedications, are not only strategically located, but further complement our emerging presence in the area. Through this acquisition, we have increased acreage dedicated to us under long-term gathering agreements in the Haynesville Shale to more than 100,000 acres," said Mac Stallcup, ETP vice president of business development for Louisiana.

The gathering network will tie to several interstate and intrastate pipelines, including Tiger.

The approximately 180-mile, 42-inch diameter Tiger system, which was announced in 2009 with a unit of Chesapeake Energy Corp. as the first shipper (see NGI, Feb. 23, 2009), would serve the Haynesville Shale region in Louisiana and the Carthage Hub area in East Texas and would have interconnects with Texas Eastern Transmission, Tennessee Gas Pipeline, Texas Gas Transmission, Trunkline Gas, ANR Pipeline, Columbia Gulf Transmission and Southeast Supply Header LLC.

The pipeline is expected to be in service in the first half of 2011, and the expansion is expected to be completed in the second half of 2011. Construction is subject to approval by FERC. Chesapeake Energy Marketing Inc., EnCana Marketing (USA), Questar Exploration and Production Co. and Tristate North Louisiana Midstream LLC are signed up as shippers.

Last month the Federal Energy Regulatory Commission issued a favorable environmental assessment for the initial Tiger project (see NGI, Feb. 1).

For information on the open season contact Luke Fletcher at (210) 403-6492 or luke.fletcher@energytransfer.com, or Lee Hanse at (210) 403-6455 or lee.hanse@energytransfer.com. Information is also available at www.energytransfer.com.

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