Gas in motion
New gas compressor station benefits Cherokee County economy
BY ROBIN D. BEST
A $27 million natural gas pumping station has been completed and is up and running.

The new compressor station, located near Reklaw will move gas through a 42-inch pipeline that extends from Central Texas, to East Texas and South Texas. The compressor station and pipeline aids gas availability and has added to the local economy via easements and property tax value. PHOTO: GLORIA JENNINGS

The new eight-compressor station constructed by Energy Transfer Corporation, will help to move gas through a new 42- inch pipeline that extends from Central Texas, to East Texas and then to South Texas.

"The compressor is designed to move natural gas to our gas market in East Texas and to the Houston Shipping Channel," said Mike Howard, chief executive officer of the Midstream Division of Energy Transfer Corporation (ETC).

"It is designed to move 1.75 BCF (billion cubic feet) per day. It is designed to move to other intrastate gas markets. The compressor station is some very new technology that is a first in the U.S. They are very big compressors that are very fuel efficient."

Running at full operating capacity, the compressors harness 45,000 horsepower in compression power. ETC built the station at a cost of almost $4 million per compressor. As the pumping station was completed making use of the largest engine ever produced by Caterpillar Corporation and shipped from Germany, the plant was put into operation in stages.

"The compressor station runs very smoothly and we have been very impressed with how well the startup has been," Mr. Howard explained.

In addition to pumping money into the local economy, the pipeline put into place by ETC provides many gas companies a vehicle for sending gas to markets where it may be sold. "It is kind of like a toll road for highway," Mr. Howard said. "The producers are the drivers. They needed to get their gas out of the Ft. Worth baseline and to East Texas to the market. We get paid by the producers to move the gas to the markets in East Texas and down to the Houston Shipping Channel."

The 42-inch line, which is the largest intrastate gas transport line in Texas, extends close to 264 miles, moving through many counties, including Cherokee. The pipeline was built at a cost of approximately $538 million. The initial success of the first pipeline has prompted engineers to plan a second 42-inch line, identical to and lying beside the first in the near future.

"It is a win-win situation for producers and ETC," Mr. Howard said. "As the gas moves through the pipe it loses pressure. You have to increase the compression into the pipeline to keep the gas moving. It increases the capacity of the gas line. Without the compression station the pipeline is about a 1.4 BCF. It provides about a 25 percent increase in capacity."

Money also was pumped into the Cherokee County and East Texas economy.

"Local land owners were paid for an easement of the pipeline, so that the pipe could move through East Texas," Mr. Howard said. "Construction started in early 2006 and production started in early April, 2007 and the last unit went into service this month, Dec. 2007. During that time, lots of construction workers, and many other workers stayed in area hotels, motels and shopped at local stores, bought gas and supplies from local stores and dealers. It has been good for everyone."

The compressor station and pipeline was a joint project of ETC, headquartered in Dallas, and the Hanover Compression Corporation of Houston.

One unique part of the station is its ability to run on gas or electricity, depending on what is most fuel efficient and most readily available.

As the pipeline and station increase to complete full capacity, more additions will be needed, bringing additional economic prosperity and jobs to East Texas.

"There will be expansions of this pipeline that will be coming in," Mr. Howard said. "We will eventually be putting in another pipeline beside this one. There will be many opportunities to expand the project in the future. This will have a continued benefit to the local economy.

"We have just been very pleased with how well all of the land owners worked so well with us in Cherokee County. It made the project come together very well."

ETC is not the only transfer company to lay down pipelines in Cherokee County. Enbridge has put 18 miles of pipeline in place at an approximate cost of $18 million per mile, also benefiting the county in a similar economic fashion. The project has boosted property values by an estimated $9 million in taxes paid by Enbridge.

In addition, new oil and gas leases have been recorded on approximately 50,000 acres of Cherokee County land.

"This is a very good project," said Mr. Howard. "It benefits Cherokee County, the gas companies who need to get their product to markets and ETC. It is a win-win-win situation."