FERC Friday gave draft environmental clearance to Texas Gas Transmission LLC’s proposed Fayetteville and Greenville laterals, which would provide transportation for producers operating in the Fayetteville Shale play in Arkansas.

“The Fayetteville/Greenville Expansion Project, with appropriate mitigating measures as recommended, would have limited adverse environmental impact,” Federal Energy Regulatory Commission (FERC) staff said in a draft environmental impact statement on the project [CP07-417].

The Fayetteville lateral will be a 167-mile, 36-inch diameter pipeline with an initial design capacity of 800,000 MMBtu/d and a maximum capacity of 1.1 Bcf/d. It will originate in Conway County, AR, and will proceed east through the Bald Knob, AR, area to an interconnect with the Texas Gas pipeline in Coahoma County, MS. The Greenville lateral will be a 98-mile pipeline with an initial design capacity of 750,000 MMBtu/d, extending from Texas Gas’ mainline near Greenville, MS, east to Kosciusko, MS.

Texas Gas said it expects to receive the FERC’s approval by April 2008. It projects that most of the Fayetteville Lateral will be in service in August 2008, with the rest of the Fayetteville Lateral and Greenville Lateral going into operation in January 2009.

Texas Gas Transmission, a subsidiary of Boardwalk Pipeline Partners LP, conducted a binding open season earlier this year. Construction of the laterals is supported by a precedent agreement for firm transportation with Southwestern Energy Services Co., a wholly owned subsidiary of Southwestern Energy Co., a leading developer of the Fayetteville Shale.

The Fayetteville lateral will receive gas at multiple points in the Fayetteville Shale play in central Arkansas and will deliver the gas to new and existing markets served by Boardwalk’s existing and planned pipelines, as well as to multiple interstate pipeline interconnects on the proposed Greenville lateral. The laterals would provide Fayetteville Shale producers with the ability to access markets on Texas Gas as well as markets (Midwest, Southeast and Northeast, along with Henry Hub) served by interconnecting pipelines.

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