A subsidiary of CenterPoint Energy Inc. (CNP) and NextEra US Gas Assets LLC, an affiliate of FPL Group Inc. (FPL) signed an agreement to explore the construction of a pipeline in north Louisiana. The new pipeline will transport natural gas from the Haynesville Shale area.

The expected capacity of the potential new pipeline is up to 2.0 billion cubic feet per day. The pipeline would connect Haynesville Shale natural gas production to markets in north Louisiana and CenterPoint Energy’s Perryville Hub.

The companies announced that an open season will be held to gauge market interest in the proposed new pipeline.

With the development of the new pipeline, CenterPoint and FPL Group expect to enhance the existing infrastructure in the rapidly expanding Haynesville Shale area. Gas production in north Louisiana, including the rapidly developing Haynesville Shale, remains robust. The new pipeline would assist producers with Haynesville and north Louisiana acreage, creating another option for their production.

Assuming adequate expressions of interest are received and management approval from both companies, a joint venture entity will be formed that would execute binding precedent agreements and seek necessary regulatory approvals to place the pipeline into service as quickly as possible. Each company would own an equal equity interest in the new pipeline. CenterPoint Energy’s pipeline group would design and oversee construction, and ultimately operate the new pipeline.
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