Southwest Natural Gas Pipeline Project Spending May Top $3 Billion In 2007

Total expenditures for natural gas transmission and natural gas storage projects seen at $7.7 billion.

The Southwest region (Texas, Louisiana, Arkansas and Oklahoma) will see almost $3.2 billion spent in 46 new natural gas pipeline construction projects in 2007, according to research released by Industrial Info Resources on Friday.

The projects, including natural gas transmission and pipeline and compressor stations facilities, have an average capital value of $68.7 million per project.

Louisiana and Texas will be the recipients of most of the perspective construction spending, with $1.7 billion and $1.2 billion in planned spending respectively, the research notes.

Projects in these states range in size from $4 million to $450 million in capital expenditures.

The high amounts in project spending are due to an increasing project count designed to move natural gas from the growing production areas of Northeast Texas and the need to move large natural gas volumes from several LNG receiving and re-gasification terminals presently under construction on the Texas and Louisiana coast lines, Industrial Info said.

Among the larger natural gas transmission projects being proposed, with capital values between $65 million and $450 million, are Duke Energy Gas Transmission, Enbridge Energy Partners, Cheniere Energy Inc., Energy Transfer Partners LP, Gulf South Pipeline Co. LP, Ozark Gas Transmission LLC, Trunkline Gas Company LLC, and Sempra Pipelines & Storage.

Along with the $3.2 billion in proposed natural gas transmission spending planned for the Southwest region, an additional $155 million in projected spending is slated for construction startup in the natural gas storage sector in 2007, according to the research.

According to Industrial Info, there are 27 major projects already on tap for 2008 in the Southwest region, with a total capital expenditure of $5.1 billion, and an average project capital expenditure of $190.7 million per project.

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