The transaction will require Enterprise, which has 8,200 miles of pipeline and 10 gas processing plants in Texas, to spend about $100 million to enhance its Texas intrastate pipeline system through a combination of pipeline and compression projects, to expand its natural gas storage facilities in Texas and to acquire certain pipeline laterals located in the Houston area. It also will have to build 11 new citygate stations to connect its systems with CenterPoint Energy's assets in the Houston area. The construction work required to serve CenterPoint is expected to be completed in phases throughout 2006 and 2007.
The project is designed to provide CenterPoint Energy with access to growing natural gas production from multiple producing regions in Texas. Enterprise currently delivers 146 Bcf per year of gas to industrial, commercial and power plant users in the Houston Ship Channel market, which is one of the largest natural gas consuming markets in the U.S.
"Expanding our pipeline system in this key market area highlights our long-term commitment to provide CenterPoint Energy access to flexible and reliable natural gas supplies for its growing customer base in the greater Houston area," said Enterprise CEO Robert G. Phillips.
He said the Enterprise system has access to major supply basins in North Texas (Barnett Shale), East Texas (Bossier), South Texas (Wilcox and Vicksburg) and West Texas (Permian). It is also connected to many major Texas markets, including the cities of San Antonio, Austin, Dallas-Fort Worth, Beaumont, Corpus Christi, Houston and the Houston Ship Channel area, as well as 19 natural gas-fired power plants. Total throughput on Enterprise's Texas pipeline system was 3.4 billion Btu/d in the first half of 2006.
Recently, Enterprise extended its pipeline in South Texas through the purchase of the Cerrito gas gathering system for $325 million. In addition, Enterprise recently completed a $27 million expansion of its 30-inch diameter West Texas pipeline system, which provided 120 MMcf/d of new capacity to bring increasing Barnett Shale and Permian Basin production into the Central Texas and Gulf Coast markets.
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