Tengasco Inc. began construction on Phase Two of its gaspipeline system following permitting by the Tennessee Department ofTransportation. The 28-mile mile second phase will complete the60-mile system, which ties Tengasco’s Swan Creek gas field intoend-user markets in Eastern Tennessee. The pipeline is the onlyintrastate gas carrier in Tennessee.

Phase Two follows State Highway 11-W from Rogersville, to theEastman Chemical facility in Kingsport, TN. Tengasco has signed a20-year contract with Eastman Chemical for a minimum of 10 MMcf/d.The contract, which is estimated to generate over $200 million ofrevenues during its term, will be serviced by the completion of thePhase Two pipeline segment.

Phase Two is estimated to cost $6 million. Completion isexpected by Oct. 1.

“Within the coming six months we will begin bringing to marketour substantial base of 104.6 Bcfe in proved reserves in the SwanCreek field,” said Mike Ratliff, Tengasco CEO. “We believe the SwanCreek field will ultimately produce more than one trillion cubicfeet of natural gas. Our current deliverability from the Swan Creekfield is 25 MMcf/d. Initially these sales will be to fulfill ourcontract obligations with Eastman Chemical. Management…We will besignificantly expanding both our markets to other end-use customersand our proved reserve base during the balance of the year…”

Tengasco is finding gas in its Swan Creek Gas Field at depthsconsidered deep for the Appalachian Basin (5,000 feet) and at coststhat are a fraction of those spent by producers in Texas and Oklahoma,Michael McCown, chief geologist for the Knoxville, TN-based company,told Daily GPI in February (see Daily GPI, Feb. 8). McCown $225,000, and oil wellsfor approximately $125,000.

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