The California energy crisis attracted two emergency gaspipeline projects last week, one from Kern River Gas Transmissionand another from El Paso Natural Gas. Together the projects wouldadd 365 MMcf/d of firm transportation to the California market bylate summer.

In response to the “urgent” need for additional gas supplies toserve California’s electric generation markets this summer, KernRiver Gas Transmission held an open season last week for 135,000Dth/d firm transportation service expected to be available by July1.

“It would mean the fast track through FERC and getting all theenvironmental permits in three-and-a-half months,” said spokeswomanBev Chipman. “It would be quicker than ever before. We’ve alreadyspoken with FERC. They are very interested, and we are veryinterested to entertain this possibility.”

FERC Chairman Curt Hebert told the House Energy and Air Qualitysubcommittee last week that the Commission was committed to movingrapidly on any projects designed to move gas to California.

Kern River, which already has one expansion on file and anotheron the way, is proposing this project as an emergency solution toCalifornia’s power crisis. The $81 million project would befinalized by April 2 based on whether the necessary permits andlicenses for construction have been obtained. Kern could cancel theproject if expansion capacity is not fully subscribed.

A portion of the emergency facilities could be incorporated intoKern River’s 2002 California Expansion Project, which is currentlyon file at FERC, or its 2003 New Generation Expansion Project,which recently underwent an open season. Kern River said theproject would include modifications to three existing compressorstations, installation of three new compressor stations andexpansion of a meter station. Several temporary facilityinstallations would be removed once the other two permanentexpansions were in place and in service.

“In response to FERC and to the state of California we havelocated available compression equipment that we could have on sitenearly immediately, and we’ve come up with a proposal to placethose compression units on the very same sites we will be using forour permanent expansions,” said Kirk Morgan, director of businessdevelopment for Williams Gas Pipeline West, which operates KernRiver. “FERC already has an application in front of them that dealswith the site locations. These are different units so there aredifferent air quality impacts, but we’re hoping that those sitescan be permitted very expeditiously…..”

Meanwhile following through on a FERC request to expand itspipeline system to California, El Paso Natural Gas filed a planlast Thursday to add 230 MMcf/d of firm capacity by Aug. 31 to helpalleviate the energy crisis.

In an amendment to an existing application for the conversion ofthe Plains All American Pipeline, El Paso said it was seeking tochange its crude-oil pipeline conversion project to an expansion ofits existing system. El Paso made the change in response to asuggestion in January by FERC’s Office of Energy Projects, whichsaid such a modification to the project “could assist the difficultsituation” now facing the California gas market.

Initially, El Paso had proposed its so-called Line 2000 projectas a loop line to replace compression that it planned to removefrom its system, and not as a system expansion. But the pipelinetold FERC that there has been a “radical change in the dynamics ofthe natural-gas market in California.” The energy crisis continuesin the region and there is an immediate need for additional volumesof gas to serve growing electric generation, the pipeline said.

El Paso asked the Commission to give it the authority to begincleaning and converting a large segment of the 1,088-mile crude oilpipeline by March 31, and to approve the overall expansion projectby mid-April. It hopes to have the expanded capacity in operationby late August.

However, it is seeking FERC approval of a project that has nosigned contracts with customers for the proposed capacity. El Pasoplans to use the extra capacity to create system flexibility tomeet peak gas demand initially. The pipeline mentioned that itplans to take a significant amount of capacity out of service fortesting this spring because of the explosion that occurred on itssystem last fall. As a result the extra capacity is needed “asquickly as possible.”

Rocco Canonica

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