Southern Union Co. on Tuesday announced an expansion project in Texas on the Trunkline Gas Co. pipeline system to increase access to Texas' natural gas storage fields, pipelines and liquefied natural gas (LNG) import terminals. The Field Zone Expansion project will be anchored by Energy Transfer Partners LP.

The project is an upgrade of Trunkline's North Texas Expansion, which was announced last year (see Daily GPI, Aug. 3, 2005; April 14, 2005). The North Texas Expansion originally was designed to add 40 miles of 30-inch diameter pipeline along an existing right-of-way from the Kountze, TX, compressor station to the Longville, LA, compressor station. It was expected to provide about 400 MMcf/d of additional capacity and be in service in 2007.

With a new anchor commitment from Energy Transfer, Trunkline will increase the capacity along the existing right-of-way from Kountze to Longville by 110 MMcf/d to 510 MMcf/d, with the construction of 45 miles of 36-inch diameter pipeline, said Southern Union spokeswoman Gina Taylor. The project will include horsepower additions and modifications at existing compressor stations. Trunkline also will create additional capacity to the Henry Hub with the construction of a 15-mile, 36-inch diameter pipeline loop from Kaplan, LA, directly into the Hub.

"We are excited to have Energy Transfer as an anchor shipper on a project that will help resolve two critical infrastructure problems facing the industry -- the movement of gas supply from Texas to Louisiana and improved liquidity at the Henry Hub," said Rob Bond, Southern Union's senior vice president of pipeline operations. "This project is part of the continuing execution of Southern Union's strategy to develop and place into operation high-value growth projects around its existing asset base."

Energy Transfer signed a binding precedent agreement with Trunkline to hold a substantial amount of capacity on its pipeline system. The firm transportation agreement, which will originate from a new connection with the recently announced Energy Transfer expansion project near Kountze, will make deliveries to multiple pipelines in Louisiana, primarily near the Henry Hub.

Trunkline expects to file the project with the Federal Energy Regulatory Commission in 3Q2006, with an anticipated in-service date in 4Q2007.

About 6.6 Bcf/d of LNG import capacity has been approved by FERC for construction in the general area of the proposed pipeline expansion. By expanding the pipeline from Kountze to Longville, Trunkline will be able to receive onshore production originating in the expanding Bossier and Barnett Shale plays and from the proposed LNG terminals planned for the Texas Gulf Coast through existing or proposed intrastate pipeline and storage connections.

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