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Texas-to-California Proposal Appears to Be Picacho Pipeline Revival

In a plan that sounds similar to the shelved Picacho Pipeline proposal, Casper, WY-based Western Energy LLC said it plans to construct a $2.6 billion, 1 Bcf/d natural gas pipeline that would run from the Waha Hub in West Texas through New Mexico and Arizona, ending at the Colorado River.

Western Energy, an affiliate of Tempe, AZ-based Pacific Texas, which proposed the Picacho Pipeline in early 2003 (see NGI, Jan. 27, 2003), said California and Nevada's demand for natural gas is expected to increase every day with new power generation plants coming on-line as well as residential use increasing sharply over the next four years. Calls to Western Energy and Pacific Texas were not returned at time of press.

"California is at the end of the pipeline, so to speak, and the current pipelines are fully subscribed," the company said. "New sources of natural gas to import via pipeline along with new infrastructure are needed for the state's future development. The project will also build a lateral line up to Las Vegas and the southern Nevada area to help with the future growth in that state."

Western Energy noted that new demand is likely on the way in California, citing the recent announcements from the ports of Los Angeles and Long Beach that 16,800 diesel trucks will be replaced, and half of the new vehicles will run on alternative fuels, such as natural gas.

The planned project would begin at the Waha Hub in West Texas then go north to New Mexico, which would allow the pipeline to tie into other sources of gas. The terminus at the Colorado River would allow the project to interconnect with existing pipelines to carry gas into the California market. In western Arizona a lateral would be built to the Las Vegas area.

The pipeline, which would be 36 inches in diameter, is in the design and planning stages. Western Energy is talking to gas suppliers to line up shipping agreements. The company said it expects the project to take three years to design, permit and construct.

The original 800-mile, 1 Bcf/d Picacho Pipeline proposal was to extend from the Permian Basin along the same transportation corridor that holds El Paso Natural Gas to the California border at Blythe. Pacific Texas received $187 million in tax credits as a result of the Tax Reform Bill of 1986. The company has said that those tax credits were used for project bond financing and to develop the 1,100 mile right-of-way from California to Texas. Part of the right-of-way is being used for the company's current projects, Pacific Texas said on its website.

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