CenterPoint Energy 2009 Annual Report Download - page 16

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14
F I E L D S E R V I C E S
FROM UNTREATED GAS
The effects of the economic downturn
were keenly felt by Field Services, our
midstream natural gas gathering and
processing business. Lower commodity prices and
lower energy demand led to a decline in natural
gas drilling of more than 42 percent from 2008,
which resulted in a decline in well connections
of 25 percent in 2009. Operating income for 2009
was $94 million plus $8 million equity income
from a jointly owned natural gas processing
plant. is compares to $147 million in 2008
plus equity income of $15 million from the
same plant. Additionally, 2008 benefited
from a one-time gain of $11 million related
to a settlement and a $6 million gain
from the sale of non-strategic assets.
Despite the downturn in the economy, we
remain very optimistic about our future. We
continued to grow last year, with daily system
throughput reaching 1.4 billion cubic feet per day
(Bcf/day) by year-end. We also grew our margins
from fee-based gathering services by 23 percent
over 2008.
Our most significant achievement last year
was to secure new, long-term agreements
with Shell and EnCana to provide gathering
and treating services in and around the
Haynesville Shale area. ese agreements
include acreage dedication and minimum volume
commitments that will provide steady, fee-based
revenue and significant growth potential.
As part of these agreements, we acquired
gathering facilities that we are expanding to
transport 0.7 Bcf/day. is will increase Field
Services’ total throughput to 2 Bcf/day, an
increase of more than 50 percent. Plus, if Shell
and EnCana commit to higher volumes, we will
further expand the facilities to support up to
an additional 1.0 Bcf/day.
We also continue to lower our cost structure.
We replaced the majority of our leased
compression assets with company-owned assets.
Initiated in 2007, this effort allows us to rapidly
meet the changing compression service needs
of customers.
We are strategically positioned to capture new
opportunities when the economy recovers and
demand returns. We are well known for our
strong customer relationships and have a proven
track record of completing projects on time and
on budget. In addition, our assets remain ideally
located in and near rapidly growing shale fields
as well as traditional production basins.