$47m Regency pipeline to extend into Haynesville

It has been announced that Regency Energy Partners' planned construction of a pipeline project is to be extended into Haynesville Shale.

Alinda Capital Partners LLC and GE Energy Financial Services plans to construct a $47 million pipeline extension of the Haynesville Expansion Project in North Louisiana to increase capacity on the Regency Intrastate Gas System (RIGS). The Red River Lateral, expansion will add approximately 100,000 MMbtu/d of capacity to the current project, bringing the total project capacity to approximately 1.2 Bcf/d.

Byron Kelley, chairman, president and chief executive officer of Regency said of the deal, "The rapid development of the Haynesville Shale has accelerated our growth opportunities around the RIGS system.

"The Red River Lateral expands our reach deeper into the sweet spot of the Haynesville Shale and strategically positions the pipeline for further growth to meet rising producer needs. We believe this is the first of several opportunities to extend the Haynesville Expansion Project."

The extension will add about 12.5 miles of 36-inch pipe to the Haynesville Expansion Project and will extend further south-west to the west side of the Red River into Red River Parish, Louisiana, an area considered to be one of the richest and most active in the Haynesville Shale.

The entire 100,000 MMbtu/d of incremental capacity on the Red River Lateral has been contracted. 75,000 MMbtu/d of additional capacity on the existing Haynesville Expansion Project is also set to be brought under contract. With the exception of a small amount of the capacity currently reserved for operational flexibility, the 1.2 Bcf/d of capacity is fully subscribed. The expansions are underwritten by firm transportation agreements with 10-year terms, and approximately 85 percent of projected revenues will come from reservation fees.

The $47 million Red River Lateral will be funded, in accordance with their ownership percentages, by all partners in the joint venture that own RIGS. Regency has a 43 percent general partnership interest in the joint venture, while Alinda, and an affiliate of GE Energy Financial Services have a 50 percent and a 7 percent general partnership interest, respectively.

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