FERC Approves Midcontinent Express Pipeline

By Stephen Barlas, Washington Editor | September 2008 Vol. 63 No. 9

Major gas producers lost their battle to stop construction of the 506 mile Midcontinent Express Pipeline (MEP) when FERC cleared the project in late July.

Apache, Chevron and Marathon, among others, tried to stop the new pipeline arguing that Midcontinent’s lease of capacity in Oklahoma from Enogex would endanger Enogex’s firm section 311 service to the producers. But in its July 25 decision, FERC said, “We find that the lease payments (to MEP) are satisfactory, there are significant benefits, and those benefits outweigh any potential harm to Enogex’s customers. Therefore, we find that the proposed lease is required by the public convenience and necessity, subject to the conditions described herein.”

MEP is jointly owned by Kinder Morgan Energy Partners LP and ETC Midcontinent Express Pipeline LLC, a subsidiary of Energy Transfer Partners LP. Midcontinent proposes to construct its project in two phases at a total estimated cost of approximately $1.34 billion $1.28 billion for the initial phase and $60 million for the expansion phase. The pipeline will start in Oklahoma and terminate in Alabama at a Transco connection.