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FERC Urged to Move Quickly on Ruby Pipeline

Colorado Gov. Bill Ritter Jr. last Tuesday called on the Federal Energy Regulatory Commission to move quickly on El Paso Corp.'s pending Ruby Pipeline, which would provide additional takeaway capacity for Rocky Mountain natural gas.

"I have been following the Ruby docket closely and was disappointed" that the Commission did not address the pipeline project at its last meeting on Feb. 18, he wrote in a letter to Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff and the commissioners.

"I cannot emphasize enough the significance of the timing of this project to Colorado and other states. Therefore I respectfully request that the FERC proceed quickly to approve the Ruby Pipeline certificate application," Ritter said. "In order for this industry to continue to thrive, producers need assurance that the produced natural gas will have sufficient 'takeaway' capacity to meet consumer demand.

"In the absence of this capacity the market for Colorado-produced natural gas will be artificially constrained and production will be reduced to the detriment of the Colorado economy and our nation's energy independence."

In mid-January the Commission issued a favorable final environmental impact statement on El Paso's Ruby Pipeline project, which would extend from near Opal, WY, through northern Utah and Nevada and terminate near the California-Oregon state line in Klamath County, OR (see NGI, Jan. 11). Ruby is expected to be in service in March 2011.

The proposed pipeline "remains on schedule and on budget," and "we expect that [FERC] approval this month, with the BLM [Bureau of Land Management] right-of-way grant expected in April," said Jim Yardley, chief of the pipeline unit, during a conference call last Monday to discuss fourth quarter earnings (see related story).

"We...plan to start construction in May/June. Over 85% of the right-of-way on the privately owned land has already been acquired. As you know, we will be utilizing seven different construction spreads from four experienced contractors," he said.

El Paso has told FERC it has binding commitments for 1.1 Bcf/d of capacity on the proposed east-to-west system. As for progress in securing additional commitments, Yardley said, "I think that we have good prospects on the market side as well as in the Rockies, but at the same time, given where the economy is today and in the Northwest it's unlikely that we will get subscribers to sign up tomorrow. Likewise, I would say the same thing about Rockies producers."

In early 2009 El Paso filed with the Commission to build the estimated $3 billion gas pipeline. Private equity fund Global Infrastructure Partners came aboard in July 2009 as a joint venture partner for the project, adding more assurance that the Wyoming-to-Oregon pipeline would be completed (see NGI, Aug. 3, 2009). And at the end of 2009 Wyoming state officials approved a plan for the state treasurer to negotiate a $300 million investment in Ruby once it's built (see NGI, Dec. 14, 2009).

El Paso will continue to be responsible for the construction of the Ruby Pipeline Project and its operations.

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