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ETC Tiger Seeks OK for Expansion

ETC Tiger Pipeline LLC, a unit of Dallas-based Energy Transfer Partners LP, has asked FERC for the green light to place into service by early August a 400 MMcf/d expansion of its system that services the Haynesville Shale and Bossier Sands.

The proposed facilities -- 20.5 miles of 42-inch diameter pipeline looping and 30,565 hp of additional compression -- would provide the firm transportation capacity to meet the demand for takeaway service from the Haynesville Shale and Middle Bossier Shale production areas in northwest Louisiana and East Texas for markets in the Midwest and East. The expansion would bring the total capacity of the ETC Tiger line to 2.4 Bcf/d.

ETC Tiger asked the Federal Energy Regulatory Commission (FERC) to act on its request by July 19, so that it may place the proposed facilities in service on or before Aug. 1.

Petrohawk Energy Corp., the third largest acreage holder in the Haynesville/Bossier Shale formation, has entered into a precedent agreement for "essentially all of the additional capacity to be created by the expansion project," ETC Tiger said [CP10-459].

According to company reports analyzed by NGI's Shale Daily, Chesapeake Energy Corp. is the largest acreage holder in the combined Haynesville-Middle Bossier formation with 515,000 net acres, followed by Encana Corp. with 350,000 and Petrohawk with 345,000.

ETC Tiger pegged the cost of the expansion at $193 million. The Commission has approved ETC Tiger's request for a predetermination supporting rolled-in rate treatment for the costs of the project in its next general Section 4 rate proceeding.

The ETC Tiger Pipeline, most of which went into operation in December 2010, is a 175-mile gas pipeline that provides takeaway capacity for the Haynesville Shale, Bossier Shale and Fort Worth Basin (Barnett Shale) production areas (see NGI, Nov. 15, 2010). It originates near Carthage, TX, extends through the Haynesville Shale area and ends near Delhi, LA, with interconnects to seven interstate pipelines.

ETC Tiger's managing entity, Energy Transfer Equity LP (ETE), is currently in a bidding war with Williams to merge with natural gas pipeline giant Southern Union Co. (see related story). ETE last week sweetened its $33/share offer to $40/share. The revised bid includes $5.1 billion in cash and equity, as well as about $3.7 billion of Southern Union's debt.

Either merger would create the largest natural gas pipeline company in the United States.

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