On August 14, 2009, we closed the sale to an affiliate of BG Group of a 50% interest in TGGT, which now holds most of our previously owned East Texas/North Louisiana midstream assets. Pursuant to the contribution agreement, we contributed TGG, which owns an intrastate pipeline in East Texas and a gathering system in North Louisiana and Talco, which owns gathering assets in East Texas/North Louisiana, to TGGT. EXCO Operating now owns 50% of TGGT and the affiliate of BG Group owns 50% of TGGT.
TGGT's midstream operations are principally designed to facilitate delivery of natural gas produced in the East Texas/North Louisiana region to markets. Revenues are derived from sales of natural gas purchased for resale and fees earned from gathering, transportation, treating and compression of natural gas. TGGT does not own any natural gas processing facilities.
EXCO Resources and BG Group jointly own a 50/50 interest in TGGT Holdings, which provides midstream services to natural gas producers. Due to the rapid natural gas production growth in the Haynesville/Bossier shale, TGGT has increased its throughput dramatically in its core areas of operation within East Texas and North Louisiana. TGGT provides fixed fee based services to natural gas producers, and its primary customers are EXCO Production Company and BG US Gathering Company. TGGT Holdings owns and operates TGG Pipeline and Talco Midstream Assets. The assets of TGG include treating facilities and gathering pipelines that connect to downstream pipelines. Talco’s assets primarily consist of gathering pipelines that provide well hookups and lateral connections.
In 2010, TGG completed a 29 mile, 36−inch diameter header for gathering natural gas from Haynesville/Bossier shale and Cotton Valley wells, principally in DeSoto Parish, Louisiana. TGG operates amine, glycol, and H2S facilities, which treat natural gas in order to meet pipeline quality specifications for downstream transportation. TGG continues to see growth in throughput in both its Legacy East Texas area as well as in its North Louisiana area.
Additionally, TGG has initiated major midstream expansion efforts in the Shelby Trough area in East Texas. TGG is currently installing the infrastructure and pipeline systems necessary to treat and gather the substantial production volumes expected from this area.
Through Talco Midstream Assets, TGGT owns and operates a network of gas gathering systems comprised of over 800 miles of pipeline located in East TX and North LA. These gathering lines primarily service Cotton Valley production in TGGT’s Legacy East Texas area and a mixture of Cotton Valley and Haynesville/Bossier production in North Louisiana. Approximately 200 miles of Talco's gathering lines are located in the core of the Haynesville/Bossier shale in North Louisiana.
The growth in throughput across TGGT’s operations has generated substantial financial growth in 2010. The projected drilling programs by producers targeting the Haynesville/Bossier shale areas of East Texas and North Louisiana are expected to generate even more dramatic growth in TGGT going forward.
Other Gas Gathering Systems
A gathering system and treating facility in the area of our Vernon Field operations, or Vernon Gathering, gathers and transports natural gas from our Vernon Field and, to a lesser extent, natural gas from third-party producers. The gathering system transports natural gas to our Caney Lake facility where the natural gas is treated and delivered to interstate pipeline systems.