$500 million pipeline in the works
Posted on Tuesday, July 1, 2008
CENTER RIDGE — Boardwalk Pipeline Partners LP has started building a 167-mile, $ 500 million pipeline to take natural gas from the Fayetteville Shale in north-central Arkansas to market. A peak of about 1, 300 people will be employed in Arkansas during the construction, which is expected to be complete early next year.
Conway County Judge Jimmy Hart estimated at a news conference Monday morning that 250 Arkansans thus far are employed by the project, which began construction in May. The payroll is an estimated $ 57 million.
The Fayetteville Shale, a natural-gas formation that stretches from north-central Arkansas to the Mississippi River, is expected to have a $ 22 billion impact on the Arkansas economy between 2005 and 2012, according to a study by the University of Arkansas. However, state officials have said that number may be exaggerated.
Originally announced in December 2006, Houston-based Boardwalk’s pipeline was expected to cost $ 360 million. Since then, the price tag has gone up because of increased labor and materials costs, said Mike Mc-Mahon, senior vice president and general counsel for Boardwalk.
“Since we’ve experienced increases in prices on some of the other projects we’ve completed, we’re estimating a little bit higher than what we first reported on costs,” McMahon said during a phone interview Monday.
Gov. Mike Beebe toured the construction site in Center Ridge on Monday morning. “Not just for this area, but for the whole state, this is jobs; it’s employment,” he said. “It’s the opportunity for people to make money and spend money. That helps the retailers — that helps every aspect of the Arkansas economy.” Boardwalk’s Fayetteville Lateral pipeline is part of an almost $ 5 billion investment to link un- conventional natural-gas sources to the company’s already established main transportation lines. The Arkansas pipeline will run from Grandview to Lula, Miss., where it will meet Boardwalk’s pipeline that runs from Louisiana to Ohio. Also part of the project is the Greenville Lateral line in Mississippi, which will run from Kosciusko to Greenville. Two other pipelines will transport gas from Texas’ Barnett Shale and from Oklahoma’s Woodford Shale.
The process to construct the 36-inch diameter line in Arkansas requires surveying, digging a trench, hauling in the pipe and welding pieces together, coating it and X-raying it and then testing it with air pressure, said Walter Bennett, vice president for operations with Boardwalk.
The first section of the Arkansas pipeline, from Grandview to Letona, should be operating by August and transporting 800 million cubic feet of natural gas per day, McMahon said. After the line is completed, it will transport up to 1. 3 billion cubic feet per day to Mississippi, he said.
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