Spectra Arkansas nat gas pipe to move liquids

OREANDA-NEWS. June 03, 2015. The US Federal Energy Regulatory Commission (FERC) has approved Spectra Energy's proposed lease of natural gas pipelines in Arkansas for conversion to refined products service.

The company will abandon a portion of its 565-mile (909km) interstate Ozark Gas pipeline system and lease it to Magellan Midstream. The 500mn cf/d (14mn m?/d) pipeline starts in Oklahoma and splits in two in Arkansas, with the northern Line 2 portion extending into Missouri and the southern mainline running east across Arkansas. The abandonment request submitted to FERC covers a 159-mile portion of those lines that has a capacity of 320mn cf/d.

The move by Spectra underscores readily available infrastructure in the Fayetteville shale region and declining output from that formation as producers pursued opportunities in more lucrative fields.

Shippers on the Ozark system could also move gas on the Fayetteville Express pipeline and Texas Gas Transmission's Fayetteville lateral. In addition, service will still be available on a 16-inch diameter portion of Line 2.

Spectra sought to abandon the pipeline segments after receiving no bids earlier this year for long-term firm service during an open season.

Output from the Fayetteville shale declined in April to about 2.7 Bcf/d, down by about 5pc from a year earlier, according to the US Energy Information Administration. Last week, the Fayetteville rig count, which can indicate where production is headed, was six, down from nine a year earlier, oil field services provided Baker Hughes said.