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Fort Union Gathering Expanding in Two Phases

ONEOK Partners LP said Wednesday that Fort Union Gas Gathering LLC is doubling its existing gathering pipeline capacity by adding 148 miles of new gathering lines and 649 MMcf/d of additional capacity. A ONEOK Partners' subsidiary, Crestone Powder River LLC, has a 37.04% interest in Fort Union Gas Gathering.

The Fort Union gathering system is located in the Powder River Basin and gathers coalbed methane from wells in northeast Wyoming, including the Big George coals. The expansion project will cost $110 million and will occur in two phases: 240 MMcf/d by Oct. 1, and 409 MMcf/d by Jan. 1, 2008. This additional capacity has been fully subscribed for 10 years, beginning with the in-service date of the expansion.

When the expansion is completed, the Fort Union system will have a capacity of 1.3 Bcf/d and span 318 miles -- three 24-inch pipes running side by side for 106 miles -- making it the largest-capacity gathering system in the Powder River Basin.

The coalbed methane on the Fort Union system requires treating to remove carbon dioxide to meet interstate pipeline gas quality specifications. Fort Union recently tripled the treating capacity of its Medicine Bow gas treating facility at the southern terminus of the Fort Union system.

The Fort Union system delivers gas into multiple interstate pipelines, including Wyoming Interstate Co.'s Medicine Bow Lateral, Colorado Interstate Gas and Kinder Morgan Interstate.

Fort Union is owned by managing member Cantera Gas Holdings LLC, a Metalmark Capital portfolio company, with a 37.04% interest; administrative manager Crestone Powder River LLC, a subsidiary of ONEOK Partners, with a 37.04% interest; Western Gas Wyoming LLC, an Anadarko company, with a 14.81% interest; and Bargath Inc., one of the Williams Companies, with an 11.11% interest. Western Gas Resources Inc., also an Anadarko company and the field operator of Fort Union, will be responsible for the construction.

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