Wednesday, March 4, 2009

CenterPoint Energy Expands Pipeline Capacity to Serve Haynesville Play

CenterPoint Energy Gas Transmission Company, a wholly owned subsidiary of CenterPoint Energy, announced yesterday that it is expanding capacity on its existing pipeline running from Carthage, TX to Perryville, LA to transport gas from the Haynesville Play. Chesapeake Energy is the "anchor tenant," taking the bulk of the new capacity (500 Mmcf/day), but there is a small amount (44 Mmcf/day) that is still available. The agreement with Chesapeake runs for 27 months and transport should commence on April 1, 2009.

This project is an expansion of capacity of the existing pipeline, so there is no new pipe being run. Instead, CenterPoint will add new compressors to existing compression stations in Westdale and Vernon. The 172 mile pipeline currently moves 1.55 Bcf/day and should run just over 2 Bcf/day after the expansion.

This is good news for Chesapeake and the Haynesville Play. On its quarterly conference call, CEO Aubrey McClendon mentioned that Chesapeake has committed to four transport projects, including this one, the Tiger Pipeline and the Regency expansion. As noted before, transportation is a huge piece of the infrastructure puzzle. You can drill as much gas as you want, but if you can't get your gas to market you can't sell it.

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