Spectra Energy’s Texas Eastern Transmission LP will provide at least 150 MMcf/d of firm transportation capacity to an affiliate of Marcellus Shale producer Range Resources Corp. to deliver Appalachian gas to markets in the Northeast, the pipeline said Monday.

To keep pace with emerging Appalachian production, Texas Eastern is proposing an expansion to increase system capacity by up to 300 MMcf/d beginning in the fourth quarter of 2012. The proposed expansion is called the Texas Eastern Appalachia to Market Expansion (TEAM) Program. The capacity agreement with Range makes the producer the project’s anchor customer.

As of last month when it released third quarter earnings Range had drilled and completed 60 horizontal Marcellus Shale wells, of which 54 were online and producing more than 80 MMcf/d (see Daily GPI, Oct. 23). Range, an early mover in the Marcellus, describes its progress as “taking a slow, disciplined approach…We expect cash flow and asset sales to fund our 2010 capital program,” Range Chairman John H. Pinkerton said during an earnings conference call.

Texas Eastern said it will soon announce a binding open season (TEAM 2012) for the remaining 150 MMcf/d capacity for the targeted 2012 in-service date. The open season is to offer transportation service from multiple existing and proposed receipt points on the Texas Eastern system within the Appalachian production region to delivery points across Texas Eastern’s market area.

Based on market demand, Texas Eastern said it also may pursue a second phase of the TEAM Expansion Program and will initiate another open season (TEAM 2013) to be announced shortly. Targeted in-service for the second phase expansion would be 2013, the pipeline said.

“With the Texas Eastern system traversing the Appalachian supply region, our expansions can be readily scaled and sized as production ramps up. In addition, our prime location in both the supply and market areas gives Spectra Energy the flexibility to offer more receipt and delivery options to customers,” said Bill Yardley, group vice president, Spectra Energy Transmission, northeast.

The proposed TEAM expansions would utilize existing utility corridors and rights-of-way where possible, Texas Eastern said.

Texas Eastern is not alone in targeting the region’s growing production. In September Dominion said it would serve the Appalachian Basin with a pipeline project to carry production from West Virginia and southwestern Pennsylvania to storage fields and pipelines in Pennsylvania (see Daily GPI, Sept. 29).

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