Southern Star Central Gas Pipeline Inc. is contemplating a new interstate natural gas pipeline to connect the developing Fayetteville Shale basin in Central Arkansas to Kinder Morgan’s Rockies Express Pipeline LLC (REX) in Audrain County, MO, the company said Friday.

Southern Star’s Highland Trails Pipeline project is conducting a nonbinding open season from June 15 to July 20 for firm transportation service (FTS). The Highland Trails Pipeline would provide access to Fayetteville Shale gas supplies, access to Rockies gas supplies and access to other gas supply areas through interconnections with other pipeline systems, providing a north-south “header” system for transportation to the Midcontinent, southern, southeastern, northeastern and eastern markets.

The pipeline would be about 346 miles long and 36 inches in diameter and would carry 700,000-1 million Dth/d using up to 100,000 hp of compression.

“It looked like all the gas supply coming out of the Fayetteville Shale was going to the South and to the East,” Southern Star’s Tim Meyer told NGI. “We thought that going north could provide interesting market dynamics, and we also looked at Rockies Express as it comes across to Audrain, MO. There are several proposed interconnects off of Rockies Express to offload gas, but there’s really not anything to, let’s say, reload REX.”

Southern Star’s interconnect with REX would be at the end of its West expansion and the beginning of its East expansion, the last leg of the mega-project. REX East is to extend 638 miles from Audrain County to Clarington, OH (see Daily GPI, May 1). Meyer said Southern Star’s project would be completed after REX East is finished.

If sufficient interest is shown, Southern Star said it will conduct a binding open season, which if successful would lead the company to file a Section 7(c) application seeking authority from the Federal Energy Regulatory Commission to construct the facilities.

“The Highland Trails Pipeline is an exciting project that will provide the natural gas industry with a strategic north-south connector between the Rockies and Fayetteville Shale supply basins, allow access to many more supply options with other pipeline interconnections, and enhance natural gas transportation service opportunities to LDC’s [local distribution companies] and municipalities in Missouri and Arkansas,” said Southern Star CEO Jerry Morris.

As contemplated, Highland Trails could also flow north-south, depending upon market demand, Southern Star’s Philip Rullman told NGI.

“That’s going to be market-driven,” Rullman said. “The intent really is for Fayetteville gas to have the ability to move North. There could be a period of time that gas could, depending on what is happening in the market, that we could actually have a south flow type of condition.”

Highland Trails isn’t the first pipe project to propose tapping the up-and-coming Fayetteville.

Fayetteville producer Southwestern Energy subsidiary Southwestern Energy Services Co. signed a 10-year precedent agreement to be a “foundation shipper” on two laterals and related facilities proposed by Boardwalk Pipeline subsidiary Texas Gas Transmission LLC.

The first lateral (the Fayetteville Lateral) would originate in Conway County, AR, and extend 167 miles to a connection with Texas Gas’ mainline in Coahoma County, MS. It would be a minimum of 36 inches in diameter and will have about 1.1 Bcf/d of capacity. The second lateral (the Greenville Lateral) would originate at the Texas Gas mainline system near Greenville, MS, and extend 98 miles eastward to interconnections with various other interstate pipelines in the Kosciusko, MS, area. It is expected to have 750,000 Dth/d of transportation capacity. The cost of the two laterals is expected to total $590 million. Depending on regulatory approvals, the expected full in-service date for both laterals is Jan. 1, 2009 (see Daily GPI, Jan 4; Dec. 18, 2006).

Ozark Gas Transmission LLC, an affiliate of Atlas Pipeline Mid-Continent LLC, recently announced it is conducting a non-binding open season for its proposed Ozark Express Expansion Project, which will extend its line on both the east and west ends to run from Oklahoma to east of the Mississippi River. The Ozark 1.1 Bcf/d expansion also will tap Fayetteville gas, along with supplies from the Arkoma and Anadarko Basin (see separate story, this issue).

As for Highland Trails, nonbinding bids may be submitted between 8 a.m. CDST June 15 and 5 p.m. CDST July 20. For more information, contact Meyer, (270) 852-4554; Rullman, (270) 852-4440; or Jim Harder, (270) 852-4550. Information also is available at Click on “open season information” in the navigation bar.

Southern Star is owned by Owensboro, KY-based Southern Star Central Corp. It is an interstate system spanning approximately 6,000 miles in the Midwest and Midcontinent.

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