FERC has given the go-ahead for CenterPoint Energy Gas Transmission (CEGT) to place into service the bulk of Phase 1 of its pipeline that extends from the Carthage Hub in East Texas to the Perryville Hub in northeast Louisiana. The start-up of most of the project comes within six months of CEGT receiving FERC approval last October (see Daily GPI, Oct. 4, 2006). The pipe will provide a market outlet for burgeoning natural gas production in North-Central and East Texas and North Louisiana.

The Phase 1 segment receiving the FERC green light includes 135 miles of the proposed 172-mile pipeline -- from Panola County, TX, to the Texas Gas interconnection in Ouachita Parish, LA -- and will provide transportation capacity of about 1 Bcf/d, said CenterPoint spokeswoman Leticia Lowe. The remaining 37 miles of the project will be placed into service later in the second quarter, she noted. In mid-March, CEGT requested FERC permission to put the 135-mile segment into service on March 30.

The second phase of the project, which would entail mostly compression, would increase delivery capacity to 1.24 Bcf/d, and is expected to be ready for service in the summer of this year, Lowe said. 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.

CEGT also anticipates building a third phase (additional compression and/or pipeline looping) that, subject to FERC approval, would increase the capacity of the pipeline to 1.5 Bcf/d by the end of the year.

The pipeline will deliver supply from three receipt points connected to Texas intrastate pipelines at 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 Midcontinent, Gulf Coast and Midwest markets.

The $425 million pipeline will 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, which are seeking outlets to markets. The East Texas/North Louisiana production areas to be accessed by the pipeline are among those 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.

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