Knoxville-based Tengasco last week began natural gas deliveries over its new intrastate pipeline to Eastman Chemical Co. under a 20-year sales contract that calls for a minimum of 10 MMcf/d. The contract, which will supply at least 80% of Eastman’s gas requirements in Kingsport, TN, is estimated to generate over $200 million of revenues during its term.
In March, Tengasco completed construction of a $6 million, 65-mile pipeline connecting Tengasco’s 50,500-acre Swan Creek oil and gas field in Hancock County, TN, to Eastman Chemical Co. Since then, Eastman Chemical engineers have been installing and testing additional plant metering facilities to accept delivery of gas.
Gas is used at Eastman Chemical for process operations and feedstock in the manufacture of chemicals, plastics and fiber products, the company said. Tengasco will be the primary supplier of natural gas to Eastman Chemical under the agreement.
Geological studies indicate that the Swan Creek field may be one of the largest natural gas and oil discoveries in the Appalachian region of the United States.
Tengasco recently said proven reserves in the Swan Creek field are estimated at 54.6 Bcf of gas and 600,000 barrels of crude oil. Probable gas reserves were estimated at 117.1 Bcf. So far, Tengasco has drilled 35 wells in the field in the Eastern Overthrust of the basin, and current deliverability is 25 MMcf/d —- with only 15% of the field developed.
Tengasco Inc. is a diversified energy company involved in oil and natural gas exploration and production, pipeline construction and other energy services.
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