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CenterPoint, Spectra Discontinue Midcontinent Pipe Project

CenterPoint Energy Gas Transmission Co. (CEGT) and Spectra Energy Corp., which comprises the former natural gas business of Duke Energy, said Wednesday they have agreed to discontinue the development of their proposed Mid-Continent Crossing (MCX) pipeline. The project had called for the construction of a massive pipeline system that would have stretched from the supply basins in West Texas to the metropolitan Pittsburgh, PA, area, providing western producers with greater access to midwestern and eastern markets.

"Market and economic analyses do not support the construction of the proposed pipeline at this time," said CEGT, the pipeline subsidiary of Houston-based CenterPoint Energy Inc., and Spectra Energy, whose businesses include Spectra Energy Transmission, formerly Duke Energy Gas Transmission (DEGT). DEGT was the original partner with CEGT in the project.

"We will continue to independently evaluate opportunities for building infrastructure to transport Midcontinent natural gas supplies, including projects in the vicinity of the proposed MCX pipeline," the companies said. "We continue to believe that there is a need for infrastructure that supports producer efforts to bring these nontraditional natural gas supplies to the eastern markets and should the appropriate project present itself, we would be willing to look at it jointly."

The MCX project consisted of a 1,600-mile, 42- and 36-inch diameter pipeline to transport up to 1.75 Bcf/d of onshore gas supplies from the Waha market center in West Texas to the Oakford/Delmont area in southwestern Pennsylvania. The project would have served customers along the way in Indiana, Ohio, western Pennsylvania and, through multiple paths, markets in eastern Pennsylvania, New Jersey, New York and New England, offering gas supply from producing basins in the Midcontinent, Rockies and West Texas.

The demise of the MCX project follow the cancellation last year of El Paso's Continental Connector project (see Daily GPI, Oct. 6). The proposed $1.2 billion Continental Connector pipeline system, which was announced in the fall of 2005, would have linked El Paso's Rocky Mountain region pipes -- Wyoming Interstate, Colorado Interstate Gas and Cheyenne Plains -- with its eastern pipelines -- ANR, Tennessee Gas and Southern Natural -- and initially spanned about 1,000 miles with 42-inch diameter pipe.

A number of other pipeline project are still in the works that would bring Midcontinent gas production to eastern markets. FERC already approved CenterPoint's 172-mile Carthage to Perryville pipeline, which 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. Other projects include Gulf South's East Texas to Mississippi project, Boardwalk Pipeline's Gulf Crossing project and Kinder Morgan Energy Partners LP and Energy Transfer Partners LP's Mid-Continent Express Pipeline, a 500-mile system that would originate near Bennington, OK, travel through Perryville, LA, and its growing gas pipeline hub, and terminate at an interconnect with Transcontinental Gas Pipe Line in Butler, AL.

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