Energy Transfer Partners announced Nov. 8 that two major interstate pipeline projects are expected to be in service ahead of schedule and significantly under budget. The 175-mile ETC Tiger Pipeline and the 185-mile Fayetteville Express Pipeline are both anticipated to be in service on December 1, 2010.
Combined, the project costs for these two pipelines are expected to total $2.02 billion, $200 million under most recent estimates and $480 million under original estimates.
“The early completion of these large-scale, interstate projects, coupled with the cost savings we were able to achieve, is an incredible accomplishment for our partnership,” said Lee Hanse, senior vice president, Energy Transfer’s Interstate Pipeline Division. “We are very proud to have two projects of this magnitude in service ahead of schedule and well below the original budget — FEP 22% and Tiger 16% — particularly in light of significant cost overruns and delays experienced by other companies in constructing interstate pipelines in recent years.”
ETC Tiger Pipeline
The 42-inch Tiger Pipeline, an interstate natural gas pipeline to serve the Haynesville Shale and Bossier Sands producing regions in Louisiana and East Texas, will have an initial capacity of 2.0 billion cubic feet per day. Through a planned expansion project subject to FERC approval, the ultimate capacity of the pipeline is expected to be 2.4 billion cubic feet per day, all of which is sold under long-term contracts ranging from 10 to 15 years.
Tiger Pipeline’s expected in-service date of December 1, 2010 is seven months ahead of the original projection of mid-2011. In addition, pre-expansion project costs are expected to be approximately $1.01 billion, down $85 million from the most recent estimate of $1.095 billion and down $190 million from the original projection of $1.2 billion.
Fayetteville Express Pipeline
The 42-inch Fayetteville Express Pipeline (FEP), a 50/50 joint venture with Kinder Morgan Energy Partners, L.P., will serve the Fayetteville Shale producing region in Arkansas. The pipeline, which will have the capacity to transport up to 2 billion cubic feet of natural gas per day, currently has approximately 1.85 billion cubic feet per day of natural gas capacity sold under long-term contracts ranging from 10 to 12 years.
FEP’s original in-service date was as late as the first quarter of 2011. Project costs for FEP are expected to total approximately $1.01 billion, down $115 million from the most recent estimate of $1.125 billion and down $290 million from the original projection of $1.3 billion. As a 50/50 partner in this project, Energy Transfer’s portion of cost savings from the original estimate totals approximately $145 million.