Shale Daily / NGI All News Access

Pony Express Conversion Project Gets Favorable Environmental Nod

FERC on Friday issued a favorable environmental assessment (EA) of Tallgrass Interstate Gas Transmission's proposal to convert the Pony Express Pipeline to meet the increasing demand for crude oil transportation service out of the Bakken formation.

"Approval of the proposed projects, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment," concluded the staff of the Federal Energy Regulatory Commission (FERC) in the EA [CP12-495].

Tallgrass is seeking authorization to abandon a 432.4-mile segment of the Pony Express (20-inch and 24-inch diameter) for transfer to affiliate Tallgrass Pony Express Pipeline (TPXP); abandon and remove three natural gas mainline compressor stations, four meter stations and associated facilities; construct a new mainline compressor station (Tescott Compressor Station) in Ottawa County, KS; construct a small lateral pipeline in Colorado, and construct a 22-mile lateral in Nebraska and Kansas; install two booster compressor units and associated facilities at the existing Glenrock Compressor Station in Wyoming and the Yuma Compressor Station in Colorado; and construct/convert/modify six meter stations to enable deliveries into and/or receipts from other interstate pipeline systems.

"The conversion of [the] Pony Express Pipeline facilities will create economic and strategic benefits for the United States' energy portfolio by linking increased domestic crude oil supplies produced from the Bakken formation in Montana and North Dakota to Cushing, OK, where the oil supplies can have access to local refineries or be transported by downstream pipelines to refineries in other regions of the country," the company told FERC in its application.

It said that gas service to existing firm customers will continue after the abandonment. However, it noted that it will require FERC approval of replacement facilities -- such as the proposed Tescott Compressor Station and lateral pipeline facilities -- to maintain the service.

Tallgrass has asked the Commission to act on its project this year. "This time frame is necessary to permit the proposed construction of replacement-type natural gas facilities, isolation of specific Pony Express Pipeline segment facilities from...the existing system, and sufficient time for conversion of the abandoned pipeline segment to accommodate the transportation of crude oil to meet a market-driven in service date of Aug. 1, 2014."

Tallgrass acquired the Pony Express Pipeline and the conversion project when it acquired Kinder Morgan Interstate Gas Transmission, Trailblazer Pipeline Co., Kinder Morgan Energy Partners LP's (KMP) Casper-Douglas natural gas processing and West Frenchie Draw treating facilities in Wyoming, and KMP's 50% interest in the Rockies Express Pipeline in November 2012.

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