To keep up with increased production volumes coming out of the numerous unconventional plays in Texas and Louisiana, CenterPoint Energy subsidiary CenterPoint Energy Gas Transmission Co. (CEGT) is holding a nonbinding 31-day open season to gauge market interest in an additional expansion of its 1.5 Bcf/d, 42-inch Carthage to Perryville (Line CP) pipeline through looping and additional compression.

Line CP extends 172 miles from the Carthage Hub in East Texas to the Perryville Hub in northeast Louisiana. CEGT said it has successfully completed the first three phases of Line CP and continues to receive expressions of interest in incremental capacity.

“Natural gas production volumes from the Bossier Sands and Barnett Shale in North and East Texas continue to exceed previous forecasts,” said Cy Zebot, senior vice president of CEGT. “As the Haynesville Shale further develops, Line CP is well positioned to expeditiously get these supplies to the marketplace. Assuming adequate expressions of interest are received, we’re prepared to execute binding precedent agreements and seek necessary governmental authorizations in anticipation of placing the first stages of this proposed project in service as early as the winter of 2009.”

CEGT noted that gas production in East Texas remains robust, in addition to the rapidly developing Haynesville Shale of eastern Texas and northwestern Louisiana. An additional expansion of Line CP would provide these incremental supplies access to the interstate pipelines serving the Midwest and Northeast through CEGT’s Perryville Hub, as well as access to markets in the Southeast through the Southeast Supply Header. Additionally, CEGT’s Perryville Hub will provide direct access to the recently announced Perryville Gas Storage project being developed near Delhi, LA.

The Perryville area has been a hotbed of activity recently. Just last week Cardinal Gas Storage Partners LLC acquired two storage development projects from CEGT, which included the Perryville Gas Storage project (see Daily GPI, June 20). On Monday a subsidiary of Cardinal Gas announced a nonbinding open season for 15 Bcf of capacity at the site (see Daily GPI, June 24).

On Tuesday CEGT launched a nonbinding 31-day open season to gauge market interest in a new firm wheeling service designed to provide shipper access to existing excess receipt and delivery capacity, along with planned future expansions of such capacity, in the growing Perryville Hub area. (see Daily GPI, June 25).

CEGT anticipates that the increased incremental capacity on Line CP would be provided with additional compression and line looping. The specific facilities required will be a function of the location and volume level commitment of potential supply sources. The company said final pricing determinations will be based on the facility costs, the level of firm commitments and the amount of interest indicated in accessing interstate pipelines connected to CEGT’s Perryville Hub. CEGT added that it will consider proposals of any term, but estimates that long-term commitments will be necessary to complete this project.

Written indications of interest should be received by CEGT by 5 p.m. CDT on July 28. For questions, please contact Kevin Holder, senior director of Business Development and project manager at (713) 207-5166 or at kevin.holder@CenterPointEnergy.com. More information is available on the CEGT website, https://pipelines.centerpointenergy.com/cegt.html.

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