Tennessee Gas Pipeline has filed plans to increase capacity onsix separate pipelines in the Gulf of Mexico that together wouldrepresent an increase of over 720 MMcf/d in offshore lines owned byTennessee and other parties and a net increase in deliverabilityout of the Gulf of 200 MMcf/d.

An open season that closed last December resulted in firmtransportation agreements that range from three months to 15 years.Coral Energy contracted for 27 MMcf/d for five years; Duke Energycontracted for 23.6 MMcf/d for one year and 11 MMcf/d for twoyears; Amoco Energy contracted for 10 MMcf/d for three months andVastar Resources made the largest commitment, totaling 30 MMcf/dfor the first year, 20 MMcf/d through the second year, 10 MMcf/dthrough the fourth year, 5 MMcf/d through the sixth year and 1MMcf/d for the full 15 years.

Tennessee says the increased pipeline capacity “will providemuch needed capacity to transport gas produced from new productionareas in the offshore Louisiana area where significant drilling anddevelopment activity is occurring.” The 527A-100 Line, owned byTennessee, is a 40-mile section of 26-inch pipeline from South PassBlock 27 to Tennessee’s Station 527. Tennessee abandoned this line,but under the current plan its capacity would be increased to 200MMcf/d. The SP 77 System, located offshore Louisiana, is ownedjointly by Tennessee and Columbia Gulf. It consists of two lines.One is the 527A-600 Line, a 36-inch pipe from South Pass Block 55to Tennessee’s 527A-100 Line in Plaquemines Parish, LA, which has acertificated design capacity of 500 MMcf/d. Its capacity wouldincrease by 200 MMcf/d. The other is the 527A-700 Line, a 26-inchpipeline extending from South Pass Block 77 to a platform jointlyowned by Tennessee and Columbia Gulf in South Pass Block 55. It hasa certificated design capacity of 425 MMcf/d. This line wouldincrease by 90 MMcf/d.

In addition, Tennessee and other parties own three supplylaterals upstream of the SP 77 System that will also need to beupgraded: The 527A-900 line, owned by Tennessee and Columbia Gulf,would be increased by 195 MMcf/d. The 527A-1300 line, owned byTennessee, Columbia Gulf and Koch Gateway Pipeline, would increaseby 30 MMcf/d. The 527A-1400 lines, also owned by Tennessee,Columbia and Koch, would increase by 7 MMcf/d.

There will be no new construction on the lines. The new volumeswill come from increased compression. Tennessee proposes installingan OPP device, a pressure transducer and a data acquisitioncollector (DAC) for a total cost of only $120,100. Although notfully subscribed, Tennessee told FERC the expansion should beapproved because the costs are “de minimus.” The company said itwas “confident that it ultimately will be successful in obtainingfirm commitments for all of the expansion capacity because of thesignificant gas supplies that are available in the offshoreLouisiana area [and] the competitive rates offered by Tennessee.”

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