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CenterPoint Energy Gas Transmission Company Signs Agreement With Chesapeake Energy Corporation Subsidiary to Transport Natural Gas

Posted on: Monday, 2 March 2009, 16:42 CST

CEGT to expand capacity on pipeline from East Texas to Perryville Hub(SM)

HOUSTON, March 2 /PRNewswire-FirstCall/ -- CenterPoint Energy Gas Transmission Company (CEGT), an indirect, wholly-owned interstate natural gas pipeline subsidiary of CenterPoint Energy, Inc. (NYSE: CNP), has executed a definitive agreement with Chesapeake Energy Marketing, Inc (CEMI), a wholly-owned subsidiary of Chesapeake Energy Corporation (NYSE: CHK) (Chesapeake), to transport Chesapeake's growing Haynesville shale natural gas production.

(Logo: http://www.newscom.com/cgi-bin/prnh/20020930/CNPLOGO)

CEGT owns and operates a 1.55 billion cubic feet per day Carthage to Perryville pipeline (Line CP). CEGT and CEMI have entered into two separate firm agreements to transport gas on both a forward haul basis to CEGT's Perryville Hub(SM) in northern Louisiana and a backhaul to Carthage, Texas.

A 27 month backhaul agreement provides for gas volumes to ramp up to 500 million cubic feet per day of firm transportation capacity, with initial gas flows beginning effective April 1, 2009.

The long term firm forward haul agreement provides for 230 million cubic feet per day of transportation capacity, effective when CEGT's Phase IV Line CP compression expansion goes into service, currently projected for April, 2010. CEGT's application for FERC approval of the Phase IV expansion has been filed.

To fulfill the forward haul requirements of the Agreement, CEGT will add a new compressor to each of the existing Line CP compressor stations at Westdale and Vernon. The expansion will add approximately 274 million cubic feet per day of capacity to CEGT's Line CP pipeline, bringing the total year-round capacity to more than 1.8 billion cubic feet per day.

"We are pleased that CenterPoint Energy can move quickly to meet this opportunity for Chesapeake, enabling these significant production volumes from the Haynesville Shale to immediately move to market," said C. Gregory Harper, Senior Vice President and Group President of CenterPoint Energy's pipeline group. "We believe that our Line CP and Perryville Hub(SM), which are well positioned to provide access to numerous markets in the Midwest and Northeast, were key to ultimately executing this agreement."

"Chesapeake continues to steadily grow our production volumes across the Haynesville region. This Agreement is yet another big step in securing the firm transportation needed to access the compelling markets of the eastern U.S.," said Aubrey K. McClendon, Chief Executive Officer of Chesapeake.

"The Phase IV expansion is advancing through the FERC certificate process and we are moving forward with the procurement, contracting, permitting and other elements to place these facilities in service by April, 2010," said Harper.

CEGT previously held an open season to solicit interest in an expansion of Line CP's capacity. CEGT is evaluating proposals for the remaining 44 million cubic feet per day capacity in the Phase IV expansion, and expects to execute definitive service agreements before the project is placed in-service in 2010.

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 over $19 billion. With about 8,800 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years. For more information, visit the Web site at www.CenterPointEnergy.com.

Chesapeake Energy Corporation is the largest independent producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Barnett Shale, Haynesville Shale, Fayetteville Shale, Marcellus Shale, Anadarko Basin, Arkoma Basin, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and East Texas regions of the United States. Further information is available at www.chk.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 events and other statements that are not historical facts are forward-looking statements. Factors that could affect actual results include the financial performance of CenterPoint Energy, the timing and impact of future regulatory decisions, and other factors discussed in CenterPoint Energy's Form 10-K for the period ended December 31, 2008, and other filings with the SEC.

SOURCE CenterPoint Energy

Source: PR Newswire

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