By OGJ editors
HOUSTON, June 10 -- Pipeline capacity is to be added in East Texas to transport gas from the burgeoning Freestone Trend to more interstate pipelines.
Energy Transfer Co., Dallas, said it plans to build a $50-60 million, 60-mile, 30-in. or 36-in. pipeline from Freestone County to Grimes County.
Energy Transfer, a private company that acquired South and East Texas midstream assets from Aquila Inc., Kansas City, Mo., in late 2002, got its first commitment of gas for the initial 650 MMcfd project last week. XTO Energy Inc., Fort Worth independent, signed to deliver 200 MMcfd of Freestone Trend gas to the pipeline for 9 years through July 2012.
Other commitments are being sought. Pipelaying should begin in late winter, and gas should begin flowing in June 2004, said Ray Davis, CEO of Energy Transfer. Energy Transfer operates 30 in. and 24 in. gas lines between Grimes County and the large Katy, Tex., storage and transshipment center. Capacity of the new link could be hiked to 1 bcfd later.
Energy Transfer is also looking at ways to provide more take-away capacity for gas being produced in the Barnett shale gas play in the Fort Worth basin, Davis said.
Energy Transfer last October paid Aquila $265 million for Southeast Texas and Midcontinent gas pipeline systems, gas and gas liquids processing assets, and Aquila's 50% stake in the 600-mile, 1 bcfd Oasis Pipeline from Waha, Tex., to the Katy market hub.
XTO said it has built gross Freestone Trend production to 310 MMcfd from 20 MMcfd in 3 years from 240 new wells. The operator said it has an inventory of 800-1,000 well locations.
The company operates wells in 12 fields from Bald Prairie in Limestone County 150 miles northeast to Whelan field in Harrison County. The other fields are Farrar, Oaks, Freestone, Dew, Luna, Teague, Bear Grass, Opelika, Willow Springs, and North Lansing.
XTO's 2003 capital budget calls for 60 workovers and the drilling of 149 new wells along the trend. Geological objectives are the Cretaceous Rodessa, Pettet, and Travis Peak formations and Jurassic Cotton Valley sand, Bossier, and Cotton Valley lime.
Between its own 27-mile pipeline and the new 60-mile system, XTO said it will control transportation capacity of 600 MMcfd by yearend 2004.
Elsewhere in East Texas, American Central Gas Technologies Inc., Tulsa, extended its centralized, low-pressure gathering system into Bethany and Deberry fields in northeastern Panola County. The extension's capacity exceeds 12.5 MMcfd, and the largest producer connected to it is moving more than 6.5 MMcfd.
The low pressure allows connection of older wells and cuts lease fuel consumption. The greater system also serves part of giant Carthage field.