Phase Two of Tengasco Inc.’s pipeline system is now underconstruction following permitting by the Tennessee Department ofTransportation. The 28-mile mile project will complete the 60-milesystem, which ties Tengasco’s Swan Creek gas field into end-usermarkets in Eastern Tennessee. The pipeline is the only intrastategas carrier in Tennessee.

Phase Two follows State Highway 11-W from Rogersville, to theEastman Chemical facility in Kingsport. Tengasco has signed a20-year contract with Eastman Chemical for a minimum of 10 MMcf/d.The contract, which is estimated to generate over $200 million ofrevenues during its term, will be serviced by the completion of thePhase Two pipeline segment. The project is estimated to cost $6million. Completion is expected by Oct. 1.

“Within the coming six months we will begin bringing to marketour substantial base of 104.6 Bcfe in proved reserves in the SwanCreek field,” said Mike Ratliff, Tengasco CEO. “We believe the SwanCreek field will ultimately produce more than 1 Tcf of natural gas.Our current deliverability from the Swan Creek field is 25 MMcf/d.Initially these sales will be to fulfill our contract obligationswith Eastman Chemical.”

Tengasco is finding gas in its Swan Creek Gas Field at depthsconsidered deep for the Appalachian Basin (5,000 feet) and at coststhat are a fraction of those spent by producers in Texas andOklahoma, Michael McCown, chief geologist for the Knoxville,TN-based company, said in February (see NGI Feb. 14).

In January Tengasco Pipeline signed a franchise agreement withthe Powell Valley Utility District to install and operate gasutility services for residential, commercial and industrial usersin Hancock County, TN (see NGI Jan. 31).

Joe Fisher, Houston

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