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FERC OKs CenterPoint's Carthage-to-Perryville Pipeline Project

FERC Monday issued CenterPoint Energy Gas Transmission (CEGT) a certificate to build a 172-mile pipeline from the Carthage Hub in Texas to the Perryville Hub in Louisiana, providing a market outlet for the burgeoning natural gas production in North-Central and East Texas and North Louisiana.

The proposed 42-inch diameter pipeline would deliver up to 1.24 Bcf/d of supply from three receipt points connected to Texas intrastate pipelines in the Carthage Hub in Carthage, TX, to four interstate pipelines that are interconnected to CEGT's Perryville Hub in Delhi, LA [CP06-85]. The interstate pipes include ANR Pipeline, Trunkline Gas, Columbia Gulf Transmission and Texas Gas Transmission, which serve Midwest, Mid-Atlantic and Northeast markets. The Carthage-to-Perryville project is separate from CEGT's existing 8,100-mile system that transports about 1 Tcf a year to Midwest markets.

"We find that the proposed [Carthage-to-Perryville line] is required by the public convenience and necessity because it will provide an important new outlet to the interstate market for natural gas from production areas that are expected to serve as rich supply sources in the future," the FERC order said.

The $403 million project, which also includes 41,240 horsepower of compression, would respond to the growing gas supplies from the Barnett Shale and Bossier Sand areas in eastern Texas, as well as the Elm Grove and Vernon Field production areas in Louisiana, that are seeking outlets to markets. The East Texas/North Louisiana production areas to be accessed by the proposed pipeline are among the areas that have exhibited the strongest reserve growth; production in East Texas alone increased to 3.2 Bcf/d in January 2004 from 2.25 Bcf/d in January 2000, according to CEGT.

CEGT requested expeditious approval of the project by FERC so that it can be completed and in service for a "significant portion" of the upcoming winter heating season.

CEGT plans to build the Carthage-to-Perryville Hub pipeline project in two phases. It expects an in-service date of early 2007 for 963,000 Dth/d of capacity in Phase I, with the remaining capacity slated for service in the summer of 2007. In a supplement to its application filed in May, the pipeline said it had executed precedent agreements with eight shippers, with terms ranging from four to 10 years, for 1.18 Bcf/d of the proposed 1.24 Bcf/d of design capacity.

While CEGT did not request a predetermination of rolled-in rate treatment, FERC gave the pipeline the green light to roll in the costs of the project in its next Section 4 rate proceeding.

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