New System Intensifies Powder River Activity
Activity continues to pour from the Powder River Basin, as CMS
Continental Natural Gas, a CMS Energy subsidiary, named Okemah
Construction Inc. as the winning bidder to build the Northern
Header Gas Gathering System. CMS Continental will be the operator
of the new header, which will help increase the accessibility of
the basin's coal bed methane gas to main market points. The cost
was not disclosed. CMS said the gathering system will be
operational November 1.
Starting from the area of the basin near Gillette and Sheridan,
WY, the 256 MMcf/d system will gather gas from 580,000 acres owned
evenly by CMS Oil and Gas, another CMS subsidiary, and Pennaco
Energy. CMS Continental is currently seeking other third party gas
supplies in the area to add to these existing dedications.
Pennaco is one of the regions largest producers. From January to
June of 1999, the Denver-based producer exceeded its own
expectations by increasing its reserve base of Powder River Basin
gas from 18.1 Bcf to 42.7 Bcf.
The Northern Header system, which will have the ability to
increase its capacity to 500 MMcf/d with added compression,
represents one of three main segments in the transportation of coal
bed methane gas from the Powder River to downstream markets.
Its main connection will be to the Fort Union Gathering system,
a 106-mile gathering line owned by a group of interested parties
including CMS (the managing member in the partnership), Enron
Capital & Trade Resources Corp., Western Gas Resources and CIG
Resources Co. The 450 MMcf/d system, which will run from Gillette
to Glenrock, WY, and is scheduled to start up in September, will
have interconnects with CIG's Powder River lateral and KN
"The Powder River Basin is our Rocky Mountain Strategy," said
William Haener, President of CMS Gas Transmission and Storage.
"Even with the Northern Header announcement, we are not done
expanding our presence in the area."
Fort Union will also have a main interconnect with Wyoming
Interstate Company's (WIC) Medicine Bow Lateral at Glenrock for
redelivery to the Cheyenne/Rockport Hub. The lateral just received
clearance from FERC earlier this week (See Daily GPI, July 29).
"There are three main parts to our transmission strategy," said
Lanny Waguespack, director of business development for CMS Energy's
Denver Office, which was recently created with the sole purpose of
supporting CMS' Powder River operations. "You've got the Medicine
Bow Lateral, the Fort Union System, and this new header. All these
things will make gas from the basin much more accessible."
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