CenterPoint Energy Gas Transmission Co. (CEGT) on Tuesday received a FERC certificate to carry out a compression expansion of its system in Arkansas to serve a longstanding local distribution customer and future market growth.
The Houston-based pipeline company plans to install a 4,700 horsepower compressor unit and associated facilities at its Round Mountain Compressor Station located on its Line J in Conway County, AR, and a 1,680 hp compressor unit and associated facilities at its Helena Compressor Station located on its Line T in Phillips County, AR.
The project, which would increase CEGT’s capacity by 110,000 Dth/d, will have a dual purpose: 1) to create additional firm capacity for an existing customer, Arkansas Western Gas Co. (AWG), in northwest Arkansas; and 2) to provide more transportation flexibility and pathing options on CEGT’s system on a number of its existing lines in northern Arkansas, the pipeline company told FERC [CP04-377].
Ultimately, 70,000 Dth/d of the project’s incremental capacity will be used to deliver volumes of gas to AWG. The local distributor has agreed to execute a firm 10-year transportation service agreement with CEGT, which would continue year to year unless terminated by either party, with service to begin on Nov. 1, 2005. CEGT would transport up to 7,000 Dth/d in the first year of the contract, and would ramp up by 7,000 Dth/d in each successive year, eventually reaching the full 70,000 Dth/d in the tenth year.
In the meantime, the difference between what is subscribed in any given year by AWG and the eventual 70,000 Dth/d contract level will be posted and made available for other potential customers, CEGT said.
The 40,000 Dth/d of project capacity that is not subscribed by AWG after 10 years also will be available for CEGT to provide service to future markets on its system, it noted.
CEGT estimated that total construction costs for the compression expansion would be $9.8 million. The certificate gives CEGT one year to complete construction of the facilities and place them into service.
The FERC order also gave the pipeline the green light to roll in the project costs in its next general Section 4 rate proceeding, “absent any material change in circumstances.”
“Since the project will have the significant beneficial effects of creating additional transportation path options and system flexibility and permitting an existing CEGT LDC customer to meet its projected residential and commercial growth requirements over the next decade with minimal adverse impacts, CEGT’s proposal is required by the public convenience and necessity,” the order said.
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