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Falcon Gas Storage Company Commences Operation of Its Worsham-Steed Gas Pipeline in the Barnett Shale of North Texas

Posted on: Monday, 22 October 2007, 15:00 CDT

Falcon Gas Storage Company, Inc. today announced that wholly-owned subsidiary NorTex Gas Storage Company, LLC, has started flowing gas through its newly constructed Worsham-Steed Pipeline, a 60-mile, 24-inch high pressure gas pipeline located in the western portion of the Barnett Shale gas play in North Texas. Initial flow rates have ranged from 150,000 -- 200,000 Mcfd and are expected to increase as gas injection activity accelerates at the Company's Worsham-Steed Gas Storage Facility.

Traversing through Jack, Parker and Hood counties, the Worsham-Steed Pipeline has a capacity of 450,000 Mcfd that can be expanded to 650,000 Mcfd. The pipeline connects with three export pipelines serving the North Texas market area -- Energy Transfer's "Old Ocean" pipeline, Enterprise Product's and Energy Transfer's "North Texas Pipeline," and Atmos Energy's "Line X" pipeline. These pipelines serve markets from the Waha Hub in West Texas to the Carthage Hub in Northeast Texas, as well as the Dallas-Ft. Worth metroplex and surrounding areas in North Texas, including the Barnett Shale. Ultimately, Falcon plans to connect the Worsham-Steed Pipeline with a total of 10 pipelines in the North Texas/Barnett Shale market area.

The Worsham-Steed Pipeline completion is an integral part of the expansion of Falcon's Worsham-Steed Gas Storage Facility, a new high-deliverability, multi-cycle (HDMC) state-of-the-art gas storage facility near Dallas-Ft. Worth with a working gas capacity of approximately 24 Bcf and over 450,000 Mcfd of deliverability. The Worsham-Steed facility, which began accepting gas for injection this month, complements the 10.5 Bcf of working gas capacity and over 500,000 Mcfd of deliverability from Falcon's companion Hill-Lake Gas Storage Facility in Eastland County, Texas.

In addition to providing transportation capacity needed for gas storage services, the Worsham-Steed Pipeline also is available for standalone gas transportation services, with additional gas transportation capacity of up to 150,000 Mcfd for Barnett Shale gas producers and processors to move growing gas production from this highly capacity-constrained region.

"We have already contracted for a portion of the standalone transportation capacity in our Worsham-Steed Pipeline and are seeing strong interest from a number of producers, processors and marketers for the rest of the capacity," said Falcon Marketing Vice President John Holcomb. "We expect to have the balance of the available transportation capacity committed within the next few months. At that point, we will consider the next expansion phase that would add another 200,000 Mcfd of capacity. The Worsham-Steed Pipeline will provide a much-needed outlet for moving gas to markets in the Dallas/Fort Worth area, especially gas-fired generation facilities, as well as to higher-valued markets elsewhere in Texas and out of state to points east and southeast.

"By the first of the year, we also will have 120,000 Mcfd of gas processing capacity in place in North Texas generating over 240,000 gallons per day of natural gas liquids," he added. "With gas storage, transportation and gas processing among the mix of services we offer, Falcon has become a fully-integrated midstream energy company with a complete complement of midstream services, all centered around natural gas storage. North Texas is a great place to be in the energy business, and we're very pleased to be one of the leaders in gas storage and related midstream energy services in this market."

About Falcon Gas Storage Company, Inc.

Through its wholly-owned subsidiaries and affiliated companies, Houston-based Falcon Gas Storage Company is one of the largest independently owned developers and operators of high-deliverability, multi-cycle (HDMC) natural gas storage capacity in the United States. Falcon's NorTex Gas Storage Company subsidiary owns and operates more than 35 Bcf of gas storage capacity with approximately 1.0 Bcfd of deliverability at Hill-Lake and Worsham-Steed. Through its MoBay Storage Hub LLC affiliate, Falcon is developing a 50 Bcf HDMC gas storage project in southern Alabama with 1.0 Bcfd of injection and withdrawal capacity. In addition, Falcon is developing a 20 Bcf HDMC gas storage project in the Desert Southwest that will be located near the San Juan Blanco Hub. Falcon subsidiaries also are involved in crude oil production, including enhanced oil recovery, natural gas processing and liquids production, and gas, crude oil and NGLs marketing and trading. Visit Falcon at www.falcongasstorage.com.

Source: Business Wire

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