HOUSTON - April 28, 2010 - CenterPoint Energy Field Services, Inc. (CEFS), an indirect, wholly-owned natural gas gathering and treating subsidiary of CenterPoint Energy, Inc. (NYSE: CNP), announced today that it will expand its gathering and treating services by 200 million cubic feet per day (MMcf/day) for subsidiaries of Encana and Shell’s growing Haynesville Shale natural gas production, pursuant to long-term agreements executed in September 2009 between CEFS and those subsidiaries. This expansion along with the base facilities of 700 MMcf/day system currently under construction brings the total capacity to 900 MMcf/day. Located in De Soto and Red River parishes in northwest Louisiana, this project is known as the Magnolia Gathering System.
CEFS estimates that the cost for this 200 MMcf/day expansion will be between $50 and $70 million. This expansion will require 1,000 gallons per minute of additional treating capacity and looping of the existing gathering trunk line, and is expected to be placed into service by the first quarter of 2011.
“The agreements with Encana and Shell for the expansion of base facilities include additional minimum volume commitments and exclusive rights to gather and treat their natural gas production from the dedicated acreage in the contract,” said C. Gregory Harper, senior vice president and group president of CenterPoint Energy’s Pipelines and Field Services group. “This expansion further increases our foundation of fee-based revenues.”
Construction of the 700 MMcf/day base facility is running ahead of schedule with substantial volumes flowing. It is expected to be fully in service by year-end.
The agreements are with Encana Oil & Gas (USA) Inc., an indirect, wholly-owned subsidiary of Encana Corporation (NYSE, TSX: ECA), and SWEPI LP, an indirect wholly-owned subsidiary of Royal Dutch Shell plc (NYSE: RDS:A).
CEFS owns and operates approximately 3,800 miles of gathering pipelines and processing plants that collect, treat and process natural gas from approximately 150 separate systems located in major producing fields in Arkansas, Louisiana, Oklahoma and Texas. CEFS gathers approximately 1.6 Bcf/day of natural gas and, either directly, or through its 50 percent interest in a joint venture, and has more than 400 MMcf/day of natural gas processing capacity throughout its entire gathering system.
CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines, and field services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total nearly $20 billion. With about 8,800 employees, CenterPoint Energy and its predecessor companies have been in business for more than 135 years. For more information, visit the Web site at www.CenterPointEnergy.com.
This news release includes forward-looking statements. Actual events and results may differ materially from those projected. The statements in this news release regarding future financial performance and results of operations and other statements that are not historical facts are forward-looking statements. Factors that could affect actual results include the timing and outcome of appeals from the true-up proceedings, the timing and impact of future regulatory, legislative, and IRS decisions, effects of competition, weather variations, changes in CenterPoint Energy’s or its subsidiaries’ business plans, financial market conditions, the timing and extent of changes in commodity prices, particularly natural gas, the impact of unplanned facility outages, and other factors discussed in CenterPoint Energy’s and its subsidiaries’ Form 10-Ks for the fiscal year ended December 31, 2009, and other filings with the SEC.