Sempra Pipelines & Storage has signed a memorandum of understanding (MOU) with Williams and TransCanada Corp. to acquire a 25% stake in their proposed Sunstone Pipeline, which would carry natural gas from the Rocky Mountain basins to Oregon. A Sempra Energy affiliate also contracted for an undisclosed amount of capacity on the proposed $2.34 billion pipeline.
Sempra Pipeline's MOU was announced at the end of the open season for transmission capacity from the Rockies supply area at Opal, WY, to Stanfield, OR. Seven other shippers have made commitments to the proposed pipe.
Sunstone, announced in March, would run 585 miles with a 42-inch diameter pipeline and capacity of up to 1.2 Bcf/d (see Daily GPI, March 14). The project, which is proposed for service in 2011, would involve constructing a new pipeline substantially parallel to the existing Northwest Pipeline system, which is jointly owned by Williams and Williams Pipeline Partners LP. In Oregon Sunstone would interconnect with Northwest and TransCanada's Gas Transmission Northwest (GTN) pipeline system.
From Stanfield, natural gas can reach California and Nevada markets via GTN. Gas also could flow to Pacific Northwest markets via Williams' Northwest system and the proposed Blue Bridge Pipeline. Natural gas could also reach Oregon markets off of GTN via the proposed Palomar Pipeline.
Williams and TransCanada executives embraced the news from Sempra.
"This strong showing provides the momentum to continue discussions with several potential customers -- including both market-area and producer customers," said Williams Gas Pipeline Co. President Phil Wright. "This is a clear demonstration of the growing level of market support for the Sunstone project."
Sempra Pipelines CEO George S. Liparidis said Sunstone would provide "needed transportation" from the Rockies "to meet growing demand in the Pacific Northwest and California markets," adding that the pipeline would "offer a critical supply alternative for these gas customers."
Many of the executed Sunstone precedent agreements are for cost-based rates, TransCanada CEO Hal Kvisle noted. "Their support underscores Sunstone's advantages in providing western states with cost-effective new access to growing Rocky Mountain production."
Although it has not yet made a final decision on its similar pipeline project, El Paso Corp. in February launched a binding open season for its proposed Ruby Pipeline LLC, a 1.2 Bcf/d pipe that also would transport gas from the Rockies to the West Coast (see Daily GPI, Feb. 20). The proposed 680-mile, 42-inch diameter interstate pipe would begin at the Opal Hub in Wyoming and terminate in Malin, OR.
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