Boardwalk Pipeline Partners said subsidiary Gulf South Pipeline Co. LP has enlarged its expansion plans for its East Texas and Mississippi pipeline projects after signing binding long-term agreements with shippers. The expansions will bring 1.5 Bcf/d of East Texas gas production from the Carthage Hub to pipeline connections in Perryville, LA, and Jackson, MS.
Following the binding contracts, GulfSouth decided to increase the diameter of the pipelines to 42-inch from 36-inch, raising the capacity of the projects to 1.5 Bcf/d from 1 Bcf/d. The total cost of the expanded projects is expected to be $800 million, an increase of $225 million from the amount previously announced.
“These additional commitments for capacity on our pipeline expansion demonstrate the tremendous demand and support for these projects,” said Rolf Gafvert, co-president of Boardwalk. “We intend to continue to work with our customers on follow-on projects to further extend our system to the Southeast markets.”
Gulf South said it will submit two separate applications for authority to construct the expansion projects with FERC. In February, FERC granted the company’s request to initiate the pre-filing process for the East Texas Expansion. Gulf South plans to file to initiate the pre-filing process on the Mississippi Expansion Project in the next 30 days.
The East Texas expansion will extend from Carthage in East Texas to Perryville in Richland Parish, LA. The gas being transported will originate from the prolific Barnett Shale and Bossier Sands producing regions of East Texas. The gas will be transported to interstate pipelines serving markets in the Midwest and Northeast, including Texas Gas (another Boardwalk subsidiary), MRT, Tennessee, ANR, Columbia Gulf and Southern Natural.
The proposed Mississippi Expansion will continue eastward from Perryville to Jackson, MS, providing shippers access to the Northeast and Southeast markets through interconnects with Texas Eastern, Transco, Southern Natural and Florida Gas.
Boardwalk said it expects the expansions to generate total annual earnings before interest, taxes, depreciation and amortization of $100 million, which is about $30 million more than previously announced. The expansions are expected to be completed during the second half of 2007.
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