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REX Open Seasons Generate 180,000 Dth/d in Firm Commitments East-to-West

Rockies Express Pipeline LLC (REX) and operator Tallgrass Energy Partners LP said Wednesday a series of open seasons for an incremental 180,000 Dth/d of east-to-west capacity has resulted in firm commitments expected to generate $13 million in revenue this year.

In February, Tallgrass revealed that it would launch an open season for roughly 150 MMcf/d of additional Zone 3 east-to-west capacity available on the pipeline. This was in addition to the designed capacity of its sold-out 800 MMcf/d expansion to Zone 3 east-to-west, which entered service at the beginning of the year.

REX said Wednesday its recently conducted open seasons for incremental capacity totaled 180,000 Dth/d between Clarington, OH, and delivery points as far west as Moultrie, IL. The open seasons yielded "firm transportation contracts with a number of parties for varying volumes and terms" that began as early as last month, management said.

REX also said Wednesday it received $150 million from onshore operator Ultra Resources Inc., part of a settlement of a $303 million breach of contract claim REX had filed during Ultra's recent bankruptcy proceedings. Ultra agreed to a new seven-year firm transportation contract with REX beginning December 1, 2019, for 200,000 Dth/d west-to-east valued at $26.8 million annually, management said.

The 1,700-mile REX, stretching from the Rockies to Clarington, OH, has become a major Appalachian Basin takeaway route since reversing to offer east-to-west flows. The pipeline, monitored daily via NGI's REX Tracker, routinely runs at or near the max of its roughly 2.6 Bcf/d Zone 3 east-to-west designed capacity. Tallgrass, through its family of companies, operates and owns a 75% stake in REX, with a subsidiary of Phillips 66 owning the remaining 25%.

Tallgrass has scheduled a second quarter conference call on Aug. 2.

Meanwhile, Crystal Heter has been named REX president. She previously served as vice president and general manager of the pipeline. Heter takes over for Matt Sheehy, who has become senior vice president of Tallgrass.

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