Pipeline Upgrade for Marcellus Gas from Chesapeake and Statoil

On February 16, 2010, El Paso Corporation announced that Tennessee Gas Pipeline Company (TGP, a wholly owned subsidiary of El Paso Corp) will develop a Northeast Upgrade Project to accommodate Marcellus Shale production and transport it to Northeast markets. TGP’s 300 line in Pennsylvania will increase capacity by 636,000 dekatherms per day to an interconnect in New Jersey.

TGP has a binding 20-year contract with Chesapeake Energy Marketing, Inc. (a wholly owned subsidiary of Chesapeake Energy Corp.) and StatOil Natural Gas LLC (a wholly owned subsidiary of Statoil) for 100 percent of the project capacity.

Most of the capital expenditure on this approximately $400-million project is expected to happen in 2013, with an in-service date scheduled for Nov 1, 2013.

In a webinar interview, Oil & Gas Investor editor-in-chief Leslie Haynes discussed the newly announced project with El Paso president, chairman, and CEO Doug Foshee.

Foshee explained that, in addition to this Northeast Upgrade Project, TGP had previously announced a 300 line expansion to support Marcellus Shale production for EQT. TGP has also signed up a number of back haul contracts in the Marcellus that will increase revenue by $50-60 million with no capital investment.

Foshee also discussed the E&P side of El Paso’s business, explaining how the company has embarked on an unconventional gas strategy, with development projects in the Haynesville Shale and new projects planned in the Eagle Ford Shale.

Haynes asked Foshee if El Paso had any plans to enter in the Marcellus Shale. Foshee replied that right now El Paso’s only footprint in the Marcellus was in TGP pipelines, but the company is always interested in good opportunities.

About Hart’s Webinars

Full disclosure:  I previously worked for Hart Energy Publishing as the Drilling & IT Editor for Hart’s E&P magazine. Through its various publications, Hart’s now offers a series of webinars. Some they charge for; others, like this live interview with Doug Foshee, are free. Audience members can submit questions in writing online. If you register or pay for a webinar, it’s available for online viewing for up to 1 year.

I’ve found these webinars to be timely, relevant and informative—and a great alternative to traveling to conferences. (Just thought I’d share the info.)

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