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FERC OKs Changes on Trunkline to Transport Eagle Ford Output

FERC has approved Trunkline Gas Co. LLC's proposal to modify a portion of its existing South Texas System to allow the bidirectional transportation of liquids-rich natural gas from the Eagle Ford Shale play in South Texas.

Trunkline, a subsidiary of Southern Union Co., proposes to isolate a 165-segment of its pipeline in South Texas, to be known as the Modified Transportation System, by closing off block valves at the Edna Compressor Station in Jackson County, TX, and installing valves at the existing Beeville Compressor Station in Bee County, TX, to allow for the bidirectional transportation of the gas.

The proposed change in the operation of the southernmost segment of its pipeline will enable Trunkline to service DCP Midstream LLC's gathering of liquids-rich gas, primarily in the Eagle Ford Shale trend. Denver-based DCP Midstream, formerly Duke Energy Field Services, said it would be the anchor shipper on the modified portion of the Trunkline system in South Texas.

"DCP, a major producer of Eagle Ford Shale gas, has entered into a precedent agreement for 336,000 Dth/d of capacity on the Modified Transmission System, demonstrating the need for Trunkline's proposal. Based on the benefits the project will provide and the lack of any identifiable adverse impacts on existing customers, other pipelines and their customers...we find, consistent with the certificate policy statement and Section 7(c) of the NGA [Natural Gas Act], that Trunkline's proposals are required by the public convenience and necessity," the Federal Energy Regulatory Commission (FERC) order said [CP11-19].

FERC also approved Trunkline's request to abandon by sale to DCP Midstream the Edna Loop, composed of approximately 13 miles of pipeline upstream of the Edna Compressor Station and approximately nine miles of pipeline downstream of the station. Moreover, it cleared the abandonment by sale or by transfer to DCP several smaller pipe facilities.

In its application, Trunkline said the pipeline system in South Texas is significantly underused. The certificated capacity on its South Texas System is 178,535 Mcf/d at the Beeville Compressor Station and 200,000 Mcf/d at the Edna Compressor Station, Trunkline said. However, throughput on the South Texas System dropped to 87,572 Dth/d in October 2010 from 98,832 Dth/d in 2005, and the Edna Loop has not been used for several years, the pipeline noted.

"Trunkline states that it would be able to use the available capacity on its South Texas System to transport liquids-rich gas with only minor modifications to its system. In doing so, Trunkline contends that it can link the Eagle Ford Shale production area to DCP's LaGloria and Gulf Plains processing plants and the rest of DCP's Gulf Coast gathering system," the order said.

DCP Midstream owns and controls more than 800 MMcf/d of natural gas processing capacity and associated fractionation within South Texas among five plants. Three DCP Midstream plants currently access Trunkline and DCP currently is building approximately 29 miles of gathering pipeline to connect the remaining plants to leverage 165 miles of the Trunkline system. Trunkline will then act as a backbone for creating a DCP Midstream processing "super-system" within South Texas, DCP said.

DCP Midstream is considered one of the nation's top three natural gas gatherers and processors, and the largest gas liquids producer in the United States.

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