Monday, January 18, 2010

LaCrosse Pipeline Info Sessions Set

It seems as though Enbridge is unfazed by the unsuccessful open season for its LaCrosse Pipeline and will hold public information sessions for the proposed pipeline in Logansport on Tuesday and Natchitoches on Wednesday.  The LaCrosse Pipeline is expected to run from Carthage, TX through the Haynesville Shale, southward to Washington Parish in southeast Louisiana, where it will interconnect with the Southern natural gas pipeline. 

Last month, Enbridge acknowledged that the LaCrosse project did not garner enough upfront support from producers in the open season process, but it did not abandon the project.  The open season process is part of a delicate dance between the pipeline developer and potential E&P customers that is an important part of financing the project.  But an unsuccessful open season is not the death of a project.  The financiers need to see adequate commitments to make the pipeline viable, but those commitments can be secured outside of the open season process.  Unfortunately for Enbridge, the company had its open season during the autumn of natural gas's discontent, which may have negatively impacted the process. 

I will be interested to see future announcements from Enbridge on this project.  Pipelines are vital for the future of the Haynesville Shale, but the Haynesville Play is one of many potentially huge North American shale plays out there.  Each of these shale plays will be "winners" in their own right, but the takeaway capacity will be an important determinant of future success, especially near term success.

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