Kinder Morgan Energy Partners, L.P. and Energy Transfer Partners, L.P. announced the two companies have entered into a 50/50 joint venture, Fayetteville Express Pipeline, LLC (FEP), to develop a new pipeline. The approximately 187-mile pipeline will originate in Conway County, Ark., continue eastward through White County, Ark., and terminate at an interconnect with Trunkline Gas Company in Quitman County, Miss. The pipeline will have an initial capacity of 2.0 billion cubic feet per day. Pending necessary regulatory approvals, the approximately $1.3 billion pipeline project is expected to be in service by late 2010 or early 2011. FEP has secured binding 10-year commitments totaling 1.575 million dekatherms per day (dth/day), including 1.2 million dth/day from Southwestern Energy Services, a wholly-owned subsidiary of Southwestern Energy Company, and 375,000 dth/day with an option for an additional 125,000 dth/day from Chesapeake Energy Marketing, Inc., an affiliate of Chesapeake Energy Corporation.
The new pipeline will also interconnect with Natural Gas Pipeline Company of America (NGPL) in White County, Ark., Texas Gas Transmission in Coahoma County, Miss., and ANR Pipeline Company in Quitman County, Miss. NGPL is operated and partially owned by Knight, Inc. Knight owns the general partner of KMP.
“We are excited about teaming up with ETP on this project,” said KMP Chairman and CEO Richard D. Kinder. “Adding new pipeline access and capacity in the Fayetteville Shale through projects like FEP is important in meeting America’s future energy needs and limiting future hurricane interruptions to the marketplace. This pipeline project represents another exciting growth opportunity for KMP.”
“The FEP project will provide shippers in the Arkansas Fayetteville Shale with much needed takeaway capacity, flexibility and access to markets,” said Lee Hanse, Senior Vice – President of Energy Transfer. “We are excited about the opportunity to partner with KMP and the continued implementation of our growth strategy.”
To gauge further shipper interest, FEP is conducting a binding open season beginning at 5 p.m. CDT on Oct. 8 and ending at 3 p.m. CDT on Nov. 7. Depending on shipper support during the open season, capacity on the proposed pipeline may be increased.
Shippers seeking additional information on the project or shippers seeking open season materials beginning Oct. 8 should contact David Matney at (713) 369-9218, Laura Heckman at (713) 369-9436 or Luke Fletcher at (210) 403-6492. Open season information will be available on Kinder Morgan’s web site www.kindermorgan.com and on Energy Transfer’s website at www.energytransfer.com. As a new interstate pipeline, the project will be under the jurisdiction of the Federal Energy Regulatory Commission.