The approximately 500-mile pipeline, which will originate near Bennington, Okla., be routed through Perryville, La., and terminate at an interconnect with Transco in Butler, Ala., will have an initial capacity of 1.4 billion cubic feet per day. Pending necessary regulatory approvals, the approximately $1.25 billion pipeline project is expected to be in service by February 2009. MEP has prearranged binding commitments from multiple shippers for 800,000 dekatherms per day, which includes a binding commitment from Chesapeake Energy Marketing, Inc., an affiliate of Chesapeake Energy Corporation for 500,000 dekatherms per day.
MEP has executed a firm capacity lease agreement for up to 500,000 dekatherms per day with Enogex, a subsidiary of OGE Energy , an Oklahoma intrastate pipeline, to provide a seamless transportation path from various locations in Oklahoma into and through MEP. The new pipeline will also interconnect with Natural Gas Pipeline Company of America (NGPL), a wholly owned subsidiary of Kinder Morgan, Inc., and with the previously announced ETP 36-inch pipeline extending from the Barnett Shale and interconnecting with ETP's Texoma pipeline near Paris, Texas.
"We are excited about teaming up with ETP on this project, which will help relieve existing constraints in the Midcontinent, Oklahoma and the Barnett Shale," said KMP Chairman and CEO Richard D. Kinder. "Adding new pipeline access and capacity through projects like MEP 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 MEP project is the latest example of pipelines providing shippers in Oklahoma and Texas with much needed takeaway capacity, flexibility and access to new markets," said ETP Co-Chairman and Co-CEO Ray Davis. "We are excited about the opportunity to partner with KMP and the continued implementation of our partnership growth strategy."
"We are pleased to support the MEP project and feel that it provides the best short and long term option to provide takeaway capacity for Chesapeake's increasing supplies of gas out of the Midcontinent and Barnett Shale areas," said James C. Johnson, president, Chesapeake Marketing, Inc.
To gauge further shipper interest, MEP is conducting a binding open season beginning at 5 p.m. CST on Dec. 13, 2006, and ending at 3 p.m. CST on Jan. 15, 2007. 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 should contact David Matney at (713) 369-9218 or Kim Watson at (713) 369-9233. Open season information is available on Kinder Morgan's web site http://www.kindermorgan.com/ . As a new interstate pipeline, the project would be under the jurisdiction of the Federal Energy Regulatory Commission.
Kinder Morgan Energy Partners, L.P. is one of the largest publicly traded pipeline limited partnerships in America and owns or operates more than 27,000 miles of pipelines and approximately 145 terminals. Its pipelines transport more than 2 million barrels/day of gasoline and other petroleum products and up to 9 billion cubic feet/day of natural gas; and, its terminals handle over 80 million tons of coal and other bulk materials annually and have a liquids storage capacity of about 70 million barrels for petroleum products and chemicals. KMP is also the leading provider of CO2 for enhanced oil recovery projects in the United States.
The general partner of KMP is owned by Kinder Morgan, Inc., one of the largest energy transportation, storage and distribution companies in North America. Combined, the two companies have an enterprise value of more than $35 billion.
Energy Transfer Partners, L.P. is a publicly traded partnership owning and operating a diversified portfolio of energy assets. ETP's natural gas transportation and storage operations include intrastate natural gas gathering and transportation pipelines, natural gas treating and processing assets located in Texas and Louisiana, and three natural gas storage facilities located in Texas. These assets include approximately 12,000 miles of intrastate pipeline in service, with an additional 600 miles of intrastate pipeline under construction, and 2,500 miles of interstate pipeline. ETP is one of the three largest retail marketers of propane in the United States, serving more than one million customers from approximately 442 customer service locations in 41 states extending from coast to coast.
Energy Transfer Equity, L.P. owns the general partner of ETP and approximately 62.5 million ETP limited partner units. Together ETP and ETE have a combined enterprise value approaching $20 billion.
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