Energy Transfer Partners L.P. (ETP) announced last month that two major interstate pipelines, the 175-mile Tiger Pipeline and the 185-mile Fayetteville Express Pipeline, would begin service on Dec. 1, ahead of schedule and well under budget.
Combined, the project costs for these two pipelines are expected to total $2.02 billion, $200 million less than the most recent estimates and $480 million under original estimates.
Lee Hanse, senior vice president of Energy Transfer’s Interstate Pipeline Division, said, “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.”
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 Bcf/d. Through a planned expansion project subject to FERC approval, the ultimate capacity of the pipeline is expected to be 2.4 Bcf/d, all of which is sold under long-term contracts ranging from 10-15 years.
Tiger Pipeline’s expected in-service date is seven months ahead of the original projection of mid-2011. In addition, pre-expansion project costs are expected to be $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.
The 42-inch Fayetteville Express Pipeline, 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 Bcf/d of natural gas, has 1.85 Bcf/d of natural gas capacity sold under long-term contracts ranging from 10-12 years.
The Fayetteville Express original in-service date was as late as the first quarter of 2011. Costs for the projects are expected to total $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 $145 million.