The LoI also contemplates a commitment by Enogex to secure up to 500,000 dth/d of capacity subscriptions for the project. These arrangements would significantly reduce the amount of new mainline construction required, resulting in less environmental disturbance and an earlier in-service target date of winter 2007-2008.
Under the letter of intent, the Continental Connector project will use existing or expanded El Paso pipeline systems to transport capacity-constrained gas from Rocky Mountain and Mid-Continent supply regions to Custer, Oklahoma. At Custer, this gas and local Mid-Continent production will be transported on existing and expanded Enogex systems for Continental Connector under a long-term lease arrangement for re-delivery in the vicinity of Bennington, Oklahoma. From there, gas will be transported on new pipeline facilities through the Perryville, Louisiana Hub to a termination with Tennessee and Southern Natural Pipelines at Pugh, Mississippi.
“This announcement with Enogex is a major step forward for Continental Connector,” said El Paso’s Eastern Pipeline President, Stephen C Beasley. “With this new letter of intent we gain the opportunity for immediate access to significant Mid-Continent supplies, leverage Enogex’ extensive infrastructure and reduce the construction time to be in service. Continental Connector is a strategic infrastructure project that will link key Rocky Mountain, Mid-Continent, and East Texas natural gas regions with a variety of markets in need of supply diversity. We are working to have this pipeline in service for the 2007-2008 winter season.”
Among the key benefits of the agreement are that it: eliminates up to 280km of new pipeline construction for Continental Connector’s planned segment across the Mid-Continent region; reduces the time required to bring new pipeline segments into service; and lessens the environmental impacts associated with new construction.