The Federal Energy Regulatory Commission issued a June 25 notice about a June 12 application from Gulf South Pipeline Co. LP requesting authorization to construct and operate its 1.42 Billion cubic feet per day Coastal Bend Header Project.
Gulf South proposes to construct:
- a new 66-mile, 36-inch diameter pipeline lateral from Wharton County, Texas, to Freeport LNG Development LP’s terminal in Brazoria County, Texas;
- the new 83,597 horsepower (HP) Wilson Compressor Station (CS) in Wharton County, Texas;
- the new 26,400 HP Brazos CS in Fort Bend County, Texas;
- the new 10,700 HP North Houston CS in Harris County, Texas;
- piping modifications at Goodrich CS in Polk County, Texas, to allow for bi-directional flow; and
- additional 15,748 HP and modifications to allow for bi-directional flow at Magasco CS site in Sabine County, Texas.
Gulf South estimates the cost of the Coastal Bend Header Project to be $690,357,089. The new facilities will deliver natural gas to Freeport LNG at Freeport LNG’s existing Stratton Ridge interconnect near Clute, in Brazoria County, Texas.
Gulf South currently owns and operates approximately 7,240 miles of pipeline facilities extending from south and east Texas through Louisiana, Mississippi, southern Alabama, and western Florida. Gulf South has numerous interconnects with other interstate and intrastate pipelines and storage facilities, which allow it to serve various on-system and off-system markets.
Four companies – BP Energy Co., Chubu US Gas Trading LLC, Osaka Gas Trading & Export LLC and E.ON Global Commodities North America LLC (called the “Foundation Shippers”) – were the sponsors of a highly competitive bidding process through which proposals were solicited from multiple pipeline companies, both interstate and intrastate, for the development and construction of facilities to provide natural gas pipeline service to Freeport LNG and to establish negotiated transportation rates for firm natural gas service to Freeport LNG. Gulf South’s preliminary discussions with the Foundation Shippers began in April 2013. Ten initial contenders participated in these discussions. The Foundation Shippers initiated a competitive bidding process in September of 2013 in which the shippers outlined critical elements in their request.
At the conclusion of 16-month process on June 2, 2014, Gulf South was selected by the Foundation Shippers as the successful pipeline company. Subsequently, precedent agreements were executed with the Foundation Shippers for 1.42 billion cubic feet per day of firm transportation capacity on the Coastal Bend Header and 1.4 Bcf/d of transportation capacity on the Legacy System.
The four Foundation Shippers executed binding precedent agreements obligating them to enter into firm transportation agreements for 1.4 Bcf/d of capacity on the Legacy System and 1.42 Bcf/d of capacity on the Coastal Bend Header with a minimum term of twenty years. The precedent agreements for firm transportation on the Coastal Bend Header include the specific terms of the firm transportation services to be provided by Gulf South.