Looking to tap the prolific Barnett Shale and Bossier Sands producing regions of East Texas, Boardwalk Pipeline Partners LP said Wednesday that its Gulf South Pipeline Co. LP subsidiary has signed long-term binding precedent agreements with customers for capacity on its East Texas and Mississippi expansion projects. The contracts provide firm commitments for the company’s proposed $575 million, 1 Bcf/d pipeline expansion.
The new capacity is expected to be in-service during the second half of 2007. Boardwalk said it expects that the projects will contribute approximately $70 million of annual incremental earnings before interest, taxes, depreciation and amortization (EBITDA). The pipeline capacity may be further expanded depending on the results of ongoing customer discussions. Much of the expansion plans were discussed in June 2005 (see Daily GPI, June 3, 2005).
The East Texas Expansion capacity will extend from Carthage in East Texas to the Perryville area in Richland Parish, LA. Natural gas originating primarily from the Barnett Shale and Bossier Sands producing regions will be transported to interstate pipelines serving markets in the Midwest and Northeast, including Texas Gas (a Boardwalk subsidiary), MRT, Tennessee, ANR, Columbia Gulf and Southern Natural.
The Mississippi Expansion will continue eastward from the Perryville area to the Jackson, Mississippi area and will provide additional supplies to customers in the Northeast and Southeast, through interconnects with Texas Eastern, Transco, Southern Natural and Florida Gas, and to the Baton Rouge/New Orleans industrial complex.
“The response Gulf South received in the market demonstrates the strong support for these projects,” said Rolf Gafvert, co-president of Boardwalk. “We will continue to work with customers to expand these projects and to extend these expansions to serve Southeast markets such as Florida. Access to prolific supply regions further reinforces the strong presence of Boardwalk Pipeline Partners.”
Gulf South said it will submit two separate applications for authority to construct the expansion projects with the Federal Energy Regulatory Commission (FERC). In February 2006, FERC granted Gulf South’s request to initiate the pre-filing process for the East Texas Expansion.
Boardwalk Pipeline Partners LP is engaged through its subsidiaries, Texas Gas Transmission LLC and Gulf South Pipeline Co. LP, in the interstate transportation and storage of natural gas. Boardwalk’s two interstate natural gas pipeline systems have approximately 13,470 miles of pipeline and underground storage fields with aggregate working gas capacity of approximately 143 Bcf.
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