New $1.3B pipeline planned for Arkansas shale

Fayetteville Express Pipeline LLC is a joint venture between Kinder Morgan Energy Partners LP and Energy Transfer Partners LP. The companies said subsidiaries of two major drillers--Southwestern Energy Co. and Chesapeake Energy Corp.--have agreed to 10-year commitments to use the line to transfer gas the companies tapped in Arkansas.

The 187-mile pipeline is expected to be in service as soon as late 2010, pending approval from the Federal Energy Regulatory Commission.

The line will run from Conway County, through White County and end in Quitman County, Miss., at a major north-south line run by Trunkline Gas Co.

The companies said the pipeline will initially be able to carry 2 billion cubic feet per day. Capacity may be expanded, depending on interest from other companies. Fayetteville Express Pipeline will receive proposals from other companies from Monday through Nov. 7.

Fayetteville Express Pipeline has a deal with Southwestern Energy to ship 1.2 million dekatherms of gas a day, and one with Chesapeake Energy for another 375,000 dekatherms per day. A dekatherm is equal to about 100 cubic feet of gas.

Plans call for the new line to connect with Natural Gas Pipeline Co. of America in White County, Texas Gas Transmission in Coahoma County, Miss.; and ANR Pipeline Company in Quitman County, Miss. Natural Gas Pipeline Co. is operated and partially owned by Knight Inc., which owns the general partner of KMP.

The line is in addition to the 167-mile Fayetteville Lateral that was begun May 31 by Boardwalk Pipeline Partners LP. That line is part of a $4.7 billion expansion project involving six states that will ship natural gas from new producing fields in Arkansas, Oklahoma, and Texas.

The Boardwalk line is to move natural gas from the Fayetteville Shale to states in the Northeast, Southeast and Upper Midwest.

KMP Chairman and Chief Executive Richard D. Kinder said the line announced Wednesday will provide a stable piece of energy infrastructure.