Regency Energy A Model For Midstream Sector

May 2011, Vol. 238 No. 5

Shannon Ming.

Dallas-based Regency Partners LP seems as though it was destined for success as a midstream operator. Regency owns 5,252 miles of gathering pipeline, eight active midstream-operated treating/processing plants and 790,000 horsepower of third-party revenue-generating compression.

Regency's assets also include a 49.99% ownership interest in the Haynesville Joint Venture which owns the Regency Intrastate Gas System, consisting of 450 miles of intrastate pipeline in north Louisiana, and a 49.9% interest in the Midcontinent Express Pipeline, which consists of 507 miles of interstate pipeline stretching from southeast Oklahoma to an interconnect in Alabama. Regency's assets are located in some of the most prolific gas-producing regions of the United States, including the Haynesville, Eagle Ford, Barnett, Fayetteville and Marcellus shales.

Regency has three primary reporting segments:gathering and processing, transportation and contract compression.

Shannon A. Ming was elected senior vice president of finance and investor relations of Regency GP LLC in November 2010. She has been with the company for five years, joining Regency after spending nearly five years with TXU Corp.

P&GJ: From your perspective, where are the best shale prospects in North America? How long can we expect this boon to last?

Ming: We believe three key areas – the Eagle Ford Shale in south Texas, the Permian Basin in west Texas and the Haynesville Shale in north Louisiana – offer the most promising opportunities for several of our business segments.

We believe wet gas will continue to have a significantly higher value over dry gas for the foreseeable future, and we expect to see NGLs continue to price significantly higher on a Btu basis. Therefore, we believe the shale plays that will receive significant investment and interest include the Eagle Ford, Bakken and Niaroba.

With fracing issues being resolved there, we are also seeing increased activity in the Haynesville shale, where Regency has built a significant G&P, transportation and treating presence.

P&GJ: What is the prospect for pipeline development in these areas and what new infrastructure does Regency have planned?

Ming: Because our business begins with our customers’ needs, we focus on creating value not only through superior customer service, operational efficiencies and guaranteed run-times, but also by listening to our customers and providing the services they need, where they need them. The recently announced JV with Energy Transfer to purchase LDH’s NGL assets is an excellent example. Producers have an urgent need for NGL takeaway and storage, in particular. This acquisition, once completed, will allow our companies to meet this critical need.

P&GJ: Overall in North America, do you see the new market dynamics dictating where future pipeline development and expansion is most likely? Do you think the number of planned pipeline miles is sufficient to handle near-term production from the various plays?