Pipeline Completion Will Increase Haynesville Shale Activity

In 2008 the potential of the Haynesville Shale region came to light as being a major shale gas resource in the U.S. Recently the Haynesville Shale has been estimated to be the largest natural gas field in the 48 continental states with an estimated 250 trillion cubic feet of recoverable gas.

The Haynesville Shale Natural Gas Formation Field is located in Louisiana and East Texas, extending up into the state of Arkansas. The formation is sometimes called the Haynesville Shale, Haynesville Shale Play, Shreveport Shale or the Louisiana Shale.

When the potential of Haynesville Shale first came into light leasing activity was tremendous. That has slowed down somewhat but production to build the pipeline and drilling has not. Charles Thomas, executive director of the Carthage-Panola County Economic Development Corporation, has said that many companies are waiting for the pipelines to be built to get the gas to market. Once the pipelines are completed then he believes drilling and support activity will pick up to match demand.

Thomas said: "There are a lot of companies ready and waiting for pipelines to be built. After all, it does not do much good to spend hundreds of thousands of dollars to rig up a well and get it into production if the natural gas cannot reach a potential market. There are lots of royalty checks being paid to lots of people down here. We hope more will be coming."

Finishing a pipeline is exactly what is trying to be accomplished by Energy Transfer Partners (ETP), a Dallas based pipeline and energy firm. The company's pipeline project in Panola County dubbed the Tiger Pipeline Project has over $1 billion invested into the project. Originating within Panola County and reaching to Richland Parish, LA, the pipeline will interconnect to seven existing interstate pipelines and one intrastate pipeline. This will enable the delivery of gas from Haynesville Shale drilling to be delivered to the Northeast, Southeast, Mid-Atlantic, and Midwest areas.

ETP has already made a formal request for federal permission to extend its original 174 mile interstate pipeline capacity from 2 billion cubic feet per day to 2.4 billion cubic feet per day. The first phase of the pipeline is expected to be ready for service in early 2011 and the expansion completed in the last half of the year 2011.

“This expansion of the Tiger System will provide vital take away capacity from the Haynesville Shale and Middle Bossier shale production areas in Louisiana and East Texas, to markets in the eastern half of the U.S.," said Luke Fletcher, vice president, Energy Transfer Partners Interstate Pipeline Division.

ETP has natural gas operations of gathering and transportation pipelines that include 17,500 miles of pipeline. It also has treating and processing assets and storage facilities which are located in Texas.
Of the operators in the area the Oklahoma City based company, Chesapeake, is one of the largest. A spokesman for the company, Kevin McCotter, reported that the company had maintained that title for the first half of the year. "The company is currently drilling with 35 operated rigs in North Louisiana and East Texas and anticipates operating an average of 36 rigs in 2010 to drill approximately 175 net wells," he said. "Chesapeake continues to experience outstanding results and is producing approximately 560 million cubic feet a day (net) from the Haynesville and Bossier Shales."

He said the Bossier Shale, which lies 500 to 800 feet above the Haynesville, is a 1-million-acre area that overlaps the Haynesville in North Louisiana and East Texas.

"The second quarter of 2010 was productive for Chesapeake as the company maintained its status as the largest leasehold owner, largest producer and most active driller of new wells in the Haynesville Shale play," McCotter said.

BP has also established a presence in the Haynesville Shale area. The pipeline’s completion will increase the activity in the area as more companies invest in the Haynesville Shale reserves. Carthage's Thomas commented that he is optimistic about what he is seeing develop as the pipeline nears completion. "Things right now are not as good as they were in 2008 - that was our best year ever. But with the pipeline, we're feeling pretty good about the future," he said.