Energy Transfer Partners has entered into an agreement with Chesapeake Energy Marketing, Inc., a wholly-owned subsidiary of Chesapeake Energy Corporation, to construct a 178-mile 42" interstate natural gas pipeline ("Tiger Pipeline"). The project will connect to ETP's dual 42" pipeline system near Carthage, Texas, extend through the heart of the Haynesville Shale and end near Delhi, Louisiana, with interconnects to at least seven interstate pipelines at various points in Louisiana.
The Tiger Pipeline is anticipated to have an initial throughput capacity of at least 1.25 Bcf per day, which capacity may be increased up to 2.0 Bcf per day based on the results of an open season. The agreement with Chesapeake provides for a 15-year commitment for firm transportation capacity of approximately 1.0 Bcf per day. The pipeline project is anticipated to cost between $1.0 billion and $1.2 billion to construct, depending upon the final throughput capacity design, with such costs to be incurred over a three-year period. Pending necessary regulatory approvals, Tiger Pipeline is expected to be in service by mid-2011.
"Energy Transfer Partners continues to implement its growth strategy of providing pipeline capacity through significant producing basins across the country. Critical infrastructure is needed to relieve growing constraints near the Carthage Hub and to provide takeaway capacity from the Haynesville Shale. The Tiger Pipeline project is another example of how our Partnership works with successful producers like Chesapeake to consummate pipeline opportunities," said Mackie McCrea, President and Chief Operating Officer of ETP. "This project will contribute to our ability to generate sustainable long term distributions for our unitholders."
"Chesapeake believes the Haynesville Shale has the potential to become the largest producing field in the country," commented Aubrey K. McClendon, Chesapeake's Chief Executive Officer. "Significant capacity must be built to insure the deliverability of natural gas from this rapidly expanding area and we are pleased to be able to support ETP in this very important project."
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