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REX Announces Friday Start-Up For Last of Zone 3 Enhancement Project

Rockies Express Pipeline LLC (REX) will begin full service on its 800 Dth/d Zone 3 Capacity Enhancement Project beginning Friday, the pipeline said.

REX posted notice to its electronic bulletin board Thursday that it would be accepting shipper nominations for the project's full designed capacity starting Friday, bringing total east-to-west capacity out of Clarington, OH, to 2.6 Bcf/d.

After getting the go-ahead from FERC, REX began rolling out the Zone 3 enhancement in stages last month, adding about 450 MMcf/d to its previous designed 1.8 Bcf/d of east-to-west capacity. NGI's REX Zone 3 Tracker for Thursday's flow date showed the pipeline transporting at 100% of a total 2.25 Bcf/d capacity.

The 1,712-mile REX, consisting of 42-inch and 36-inch pipe, stretches from the Rockies to Ohio. Since adjusting to offer east-to-west flows through its Zone 3 segment, the pipeline -- originally conceived for west-to-east transmission -- has become an important takeaway route for constrained Appalachian Basin producers.

"The completion of the Capacity Enhancement Project marks another important milestone in the transformation of REX into the nation’s northernmost bi-directional natural gas header system," REX President Matt Sheehy said. "Our original Capacity Enhancement shippers saw the long-term value in the project over two years ago when they contracted with us. Since then, as others embraced the REX value proposition, we have steadily added incremental long-term customers to this project, fully subscribing the 0.8 Bcf/d."

REX Vice President Crystal Heter added, "We are pleased we delivered this significant capital project on time and at a cost that is expected to be less than our project budget."

The 800 MMcf/d enhancement comes online as the timing of another major westbound Appalachian takeaway expansion, the Ohio-to-Michigan Rover Pipeline, comes into question. Rover asked the Federal Energy Regulatory Commission last month to issue a decision on their certificate application before the start of the new year to avoid delays, but that deadline came and went without a final order.

Tallgrass Energy owns a 75% stake in REX through its affiliated companies, with Phillips 66 owning the remaining 25%.

Earlier this week, Tallgrass dropped down Tallgrass NatGas Operator, which operates REX for an annual fee, into its Tallgrass Energy Partners LP master limited partnership.

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