Duke Energy and CenterPoint said Tuesday that Florida Power & Light (FPL) has signed an agreement for about half the capacity on the proposed 1 Bcf/d Southeast Supply Header pipeline system, which would extend about 270 miles from the Perryville Hub in northeastern Louisiana to the entry point of the Gulfstream Natural Gas System in southern Alabama.

The proposed pipeline is designed to bring growing production from the Barnett Shale and Bossier plays, among others, in East and North Texas to the Southeast’s rapidly growing power generation markets. The system is expected to be in service in June 2008.

The agreement with FPL is contingent upon a favorable decision by the Florida Public Service Commission for cost recovery. A decision is expected this fall. Pipeline sponsors Duke and CenterPoint said they are continuing discussions with other potential shippers on the remaining 500 MMcf/d of proposed capacity.

The Southeast Supply Header will be a 36-inch diameter pipeline that extends from the Perryville Hub, which is owned by CenterPoint Energy Gas Transmission, to Gulfstream, which is 50% owned by an affiliate of Duke Energy Gas Transmission. Gulfstream extends across the Gulf of Mexico from near Mobile, AL, to the Florida peninsula. Along its route, the Southeast Supply Header will access several other major pipelines serving the eastern United States, including Florida’s other major pipeline, Florida Gas Transmission, and will have access to several storage facilities.

“The level of FPL’s commitment is essential to achieving the scale needed to support the capital investment required by such a project,” said Cy Zebot, chief commercial officer of CenterPoint Energy’s pipelines group. “We believe that FPL and its customers will benefit from the supply diversity and flexibility that this project will provide.”

Terry Morrison, vice president of FPL’s energy marketing and trading division, said the new pipeline would significantly increase gas deliverability into both pipelines that serve a majority of Florida, and enhance “supply security and reliability when weather events threaten production in the Gulf of Mexico.”

The pipeline sponsors already have started the pre-filing process at the Federal Energy Regulatory Commission (FERC) for the project. An application is expected in November. Once the project is approved by FERC, construction is anticipated to begin in November 2007.

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