The second half of the 500-mile Midcontinent Express Pipeline (MEP) went into operation over the weekend, providing shale natural gas producers with a major route to eastern markets. This portion of the $1.3 billion line spans about 207 miles from Delhi, LA, to Transcontinental Gas Pipe Line’s (Transco) Station 85 in Butler, AL. Interim service on the first half of the pipeline — from Bennington, OK, to Delhi — began in April (see Daily GPI, June 16).

The much-anticipated pipeline, a joint venture of Kinder Morgan Energy Partners LP and Energy Transfer Partners LLC, is in response to robust natural gas production from various shales in Texas, Arkansas and Oklahoma. It will move gas eastward to markets in Florida and the Northeast. The pipe is also seen as a way to keep supply and markets connected should Gulf of Mexico production go offline in the event of a hurricane.

“The completion of this final segment of MEP affords shippers and producers in the Barnett Shale, Bossier Sands and other producing regions access to markets in eastern United States,” said Lee Hanse, senior vice president of Energy Transfer’s Interstate Pipeline Group.

MEP capacity currently is up to 1.25 Bcf/d in Zone 1, which interconnects with the Columbia Gulf Transmission system in Delhi, and up to 0.84 Bcf/d in Zone 2, which interconnects with the Transco system in Butler. An expansion of the pipeline is expected to be completed in 2010, which would increase MEP’s capacity to approximately 1.8 Bcf/d in Zone 1 and 1.2 Bcf/d in Zone 2, according to MEP. The pipeline said its capacity, including the expansion capacity, is fully subscribed with long-term binding commitments from creditworthy shippers. The expansion capacity has been awarded to two shippers: Chesapeake Energy Marketing Inc. and National Fuel Marketing Co.

The pipeline facilities include 40 miles of 30-inch diameter pipe; 266 miles of 42-inch diameter pipe; and 201 miles of 36-inch diameter pipe, as well as two compressor stations in Lamar County, TX, and Union Parish, LA, and one booster station. Construction at the two stations in Cass County, TX, and Hinds County, MS, are expected to start this fall, MEP said.

MEP has up to 13 receipt/delivery interconnections providing access to downstream markets, including those served by Natural Gas Pipeline Company of America, Transco, Texas Eastern Transmission, Tennessee Gas Pipeline, Columbia Gulf, Texas Gas Transmission, Southern Natural Gas, Destin Pipeline and ANR Pipeline.

Kinder Morgan Energy Partners and Energy Transfer Partners each own a 45% interest in MEP. MarkWest Pioneer LLC, a subsidiary of MarkWest Energy Partners LP, last year entered into an option agreement to acquire 10% of the equity of MEP after construction is completed and it is placed into service (see Daily GPI, Jan. 29, 2008).

Denver-based MarkWest Energy Partners, along with ArcLight Capital Partners, are building a 50-mile interstate gas pipeline (Arkoma Connector) that would allow producers in the Woodford Shale area of Oklahoma to interconnect with the MEP and Gulf Crossing pipeline systems for delivery of their gas to eastern markets (see Daily GPI, May 5). The two lines would interconnect with the Arkoma Connector near Bennington. MarkWest previously said it planned to complete the Arkoma Connector in May. However, the status of the project could not be immediately determined.

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