NorTex Gas Storage Co. LLC, a subsidiary of Falcon Gas Storage Co. Inc., has started construction of the Worsham-Steed Pipeline, a 63-mile, 24-inch gas pipeline connecting Falcon's Worsham-Steed Gas Storage Facility and tapping into the western portion of the Barnett Shale gas play in North Texas. Both a storage field expansion and the pipeline are expected to be in service in September.
The Worsham-Steed Pipeline will have an initial capacity of 450 MMcf/d, expandable to 650 MMcf/d. NorTex also has received FERC approval for market-based rates for its service from its high-deliverability, multi-cycle Worsham-Steed storage facility, currently being expanded to 16 Bcf capacity. Falcon already has similar authority from the Texas Railroad Commission for intrastate gas storage services.
Pipeline construction, begun the week of May 21, is scheduled to be completed in August with service start-up in September. The pipeline crossing Jack, Parker and Hood counties initially will connect with three pipes that serve the North Texas market area -- Energy Transfer's Old Ocean pipeline, Enterprise Product's North Texas Pipeline and Atmos Energy's Line X pipeline. Each of these serves markets from the Waha Hub in West Texas to the Carthage Hub in Northeast Texas, as well as the Dallas-Fort Worth metroplex and surrounding areas in North Texas.
Ultimately, the Worsham-Steed Pipeline will connect with as many as 10 pipelines in the North Texas/Barnett Shale market area. Initially, 300 MMcf/d of the pipeline's capacity will be reserved for injection and withdrawals from the storage field. All of Worsham-Steed's available storage capacity has been contracted under multi-year service agreements.
A second storage expansion, planned for the second quarter of 2008, will increase Worsham-Steed's capacity to nearly 23 Bcf. Falcon has received Federal Energy Regulatory Commission approval to charge market-based rates for the interstate gas storage services NorTex provides from Worsham-Steed. The remaining 150 MMcf/d of Worsham-Steed Pipeline capacity will be made available on a standalone basis to shippers in the Barnett Shale play.
A pipeline expansion, planned for the third quarter of 2008, will increase the pipeline's capacity to 650 MMcf/d. The incremental 200 MMcf/d of capacity will be available to support the expanded storage capacity, as well as to provide additional standalone gas transportation services in the North Texas market.
"We are very pleased with the strong market support we have received for both gas storage and gas transportation services in North Texas," said Falcon President John M. Hopper. "Both of our North Texas gas storage facilities, Hill-Lake and Worsham-Steed, are completely sold out, prompting us to plan further expansions, ultimately to a combined 33.33 Bcf of working gas capacity. That makes Falcon the second largest gas storage provider in North Texas.
"Now we are moving into standalone gas transportation services with our Worsham-Steed Pipeline," Hopper added. "This will provide gas producers and other shippers in the Barnett Shale with a much-needed new take-away pipeline option to move gas out of North Texas into higher-valued markets elsewhere in Texas and out of state to points east and southeast.
"By the end of the year, we also will have 120 MMcf/d of gas processing capacity in place in North Texas, making Falcon a 'fully-integrated' midstream energy company with a full complement of midstream services."
©Copyright 2007 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.