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Medicine Bow Gets Preliminary Nod from FERC

Medicine Bow Gets Preliminary Nod from FERC

Wyoming Interstate's proposed $78 million Medicine Bow Lateral in the Powder River Basin won preliminary approval from FERC yesterday. In a draft order, the Commission said the pipeline, which would provide 260,000 Dth/d of new firm take-away transportation capacity for Wyoming producers, would be in the public interest, subject to a final order following environmental review.

WIC submitted precedent agreements signed with six non-affiliated shippers for terms ranging from 10 to 13 years. The agreements call for 143,000 Dth of firm transportation capacity initially, increasing to 368,000 Dth/d in years four through 10 and decreasing thereafter. WIC intends to file for an expansion of the lateral beyond 260,000 Dth/d at a later date.

The Commission approved WIC's proposed negotiated rate, which would be $0.172/Dth, including reservation and commodity components, on a 100% load factor basis. The proposed rate would decrease to $0.159/Dth plus surcharges once total contracted volume on the line reaches 250,000 Dth/d.

The proposed pipeline would extend 150 miles off of WIC's mainline into the Powder River Basin in northeastern Wyoming. It would connect with a third party carbon dioxide extraction plant and a non-jurisdictional gathering system in the basin.

Coal-bed methane production in the Powder River is expected to grow rapidly over the next decade. The basin holds and estimated 15 Tcf in recoverable gas reserves.

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