Regency expands Haynesville takeaway capacity

Christopher E. Smith
OGJ Pipeline Editor

HOUSTON, Sept. 14 -- Regency Energy Partners LP, Alinda Capital Partners LLC, and GE Energy Financial Services announced plans to construct a $47 million pipeline extension of the Haynesville Expansion Project (HEP) in North Louisiana to increase capacity on the Regency Intrastate Gas System (RIGS). The extension, called the Red River Lateral, will add 100,000 MMbtu/day of capacity to the current project, bringing the total capacity to about 1.2 bcfd. Regency described the Red River Lateral as the first of several opportunities to extend the HEP.

The lateral will add 12.5 miles of 36-in. pipe to the HEP, reaching further southwest to the west side of the Red River into Red River Parish, La. All the incremental capacity on the Red River Lateral has been contracted and 75,000 MMbtu/day of additional capacity on the Haynesville Expansion has been contracted as well. The expansion’s 1.2 bcfd of capacity is fully subscribed with the exception of incremental space held back for operational flexibility.

Construction of the expansion project—including the Red River Lateral—is on schedule to meet a planned in-service date of Dec. 31, according to Regency. The 46 miles of 36-in. pipeline used is now being commissioned. Construction continues on 75 miles of 42-in. pipeline. Regency plans to begin construction of the Red River Lateral later this month.

The lateral will be funded by each of the partners of the RIGS joint venture in accordance with their ownership percentages. Regency has a 43% general partnership interest in the joint venture, while Alinda, and an affiliate of GE Energy Financial Services, have a 50% and a 7% general partnership interest, respectively. The companies formed the joint venture late first-quarter (OGJ Online, Apr. 1, 2009).

The expansions are underwritten by firm transportation agreements with 10-year terms, and roughly 85% of projected revenues will come from reservation fees.

Contact Christopher E. Smith at chriss@ogjonline.com.

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