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El Paso Offers Capacity on Southern Mainline, Delivery to California Points

El Paso Offers Capacity on Southern Mainline, Delivery to California Points

El Paso Natural Gas announced an open season for transportation capacity on its southern mainline from the Permian Basin in West Texas and New Mexico to markets on the Mojave pipeline system in Southern California. This new open season would be for capacity that El Paso proposes to make available on its southern mainline in conjunction with new crossover capacity on the proposed Line 1903 project.

The offering will include capacity on the southern mainline, Line 1903 and Mojave and will allow parties to submit bids for transportation service from Permian receipt points to delivery points on the western end of Mojave in the vicinity of Wheeler Ridge or to intermediate points, including Ehrenberg, AZ, using existing and released capacity.

El Paso said it anticipates having up to 300 MDth/day of capacity from Ehrenberg to Wheeler Ridge. However, it did not provide details on the amount of capacity it expects to be available on the southern mainline.

The $31.1 million Line 1903 expansion, which was filed with FERC last year, is expected to boost system capacity this year by 502 MMcf/d. It essentially will provide a needed crossover between El Paso's north system and south system mainlines, similar to the already existing Havasu Crossover.

The Line 1903 project would combine existing facilities owned and operated by El Paso, Mojave and Kern River. The project also will include the acquisition by El Paso of firm capacity on Mojave, the construction of a new interconnect at a point between Mojave and Line No. 1903 (the Cadiz Crossover), the modification of facilities at Kern River's existing compressor station at Daggett, CA, to permit gas to flow east from Daggett to Mojave, and the conversion to gas service of Line No. 1903.

Depending upon the capacity volumes requested in this latest open season, El Paso said additional compression facilities may be required at Ehrenberg and/or at a point near Cadiz. Also, additional delivery point capacity and/or downstream facilities may be required on the Mojave Pipeline. El Paso said it may end up building the facilities or having Mojave build them, which could result in an additional open season on Mojave.

Shippers who wish to release capacity should notify El Paso of the amount, the term and any other conditions. El Paso will rationalize release offers with shipper requests for new capacity.

The current recourse maximum rates and fuel rates for service from the Permian Basin to Ehrenberg are as follows: Reservation Rate ($ Dth/month) $9.49521; Usage Rate $0.0359/Dth; 100% Load Factor Rate $0.34807/Dth Compressor Fuel, Lost and 3.27-3.78%. In addition to the recourse rate, El Paso said it expects that for delivery points on Line 1903 or at the west end of the Mojave Pipeline there will be an additional facilities charge of up to 5 cents/Dth.

El Paso plans to finalize the optimum facility design for any new project by March 31 so that transportation services could begin in the first quarter of 2006. If no new facilities are required El Paso will begin new service upon completion of Line 1903 later this year.

For more information on the open season, contract Sean Kolassa (719) 520-4892, Scott Dalene (719) 520-4819, or Will Brown (719) 520-4250.

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