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FERC Gives Nod to Colorado Pipeline Projects

FERC Gives Nod to Colorado Pipeline Projects

FERC turned the heat up on pipeline competition in the Colorado and Wyoming markets up a notch or two when it gave KN Wattenberg Transmission the go-ahead to start work on its proposed 109-mile Front Runner pipeline project, and gave competitors Wyoming Interstate Co. (WIC) and Colorado Interstate Gas (CIG) the green light to carry out the construction of new compression and metering facilities.

KN Wattenberg's proposed Front Runner project would compete directly with the Public Service Company of Colorado's 53-mile Front Range pipeline project, which has already been approved by the Colorado Public Utilities Commission and is under construction. Public Service, which is loosely connected to WIC/CIG, is an LDC serving customers in Colorado. Both pipeline projects are in a race to serve a growing Denver market.

Specifically, KN Wattenberg plans to build 56 miles of 16- and 24-inch pipe from near Rockport, CO, south to Greeley where it then will build about 19 miles of smaller delivery and supply laterals. It also plans to acquire an existing 34-mile pipeline from affiliate KN Gas Gathering that extends from Greeley south to the Denver metropolitan area. When both segments are combined, the pipeline will have a design capacity of 254 MMcf/d, and will carry gas north-to-south from the Rockport receipt point to delivery points in the Denver market [CP-49-001]. KN Wattenberg says it is shooting for the new pipeline to be in operation either late this year or early 1999.

In approving the Front Runner project, the Commission order noted it would "assure that gas produced in Wyoming will be able to reach markets in Colorado, offer a means for gas volumes produced in Colorado's Denver-Julesberg Basin to reach new out-of-state markets, and contribute to the development of the Rockport Hub." Moreover, KN Wattenberg argued that its project would introduce pipeline-on-pipeline competition for the first time into a region that it claims has long been dominated by CIG. FERC, over the objections of Public Service Company, granted KN Wattenberg's request for an optional certificate to build the new line, which means it isn't required to show evidence of market support [CP98-49].

The Front Runner line would parallel Public Service Company of Colorado's Front Range project, which also would extend from Rockport into the Denver market. KN Wattenberg strongly protested the competing Front Range line, claiming that it and the WIC/CIG compression project, which FERC approved last week, were a single, integrated project that was intentionally bifurcated so that the Front Range project could win quick approval from the Colorado PUC and "leapfrog" KN Wattenberg's Front Runner pipeline. This, KN Wattenberg argued, would allow CIG to maintain its hold over the Colorado gas market. FERC rejected KN Wattenberg's complaint but last week was asked to reconsider [CP98-271].

Public Service and WIC/CIG are connected in that their parent companies own an equal interest in Wyco Development, which will own the Front Range facilities. CIG will build the proposed facilities, while Public Service will operate and manage them.

In a separate order, the Commission gave WIC approval to construct a 4,680 hp compressor unit at its existing Laramie compressor station in Wyoming [CP98-128]. The unit will connect CIG's 100-mile Powder River Basin lateral and WIC's mainline, creating about 49 MDth/d of additional transportation capacity on the lateral [CP98-128]. WIC proposes to lease the capacity from CIG to use as an additional supply leg on its existing system. It also plans to build a 2,700 hp compressor unit at its existing Cheyenne compressor station near Rockport. This, it says, will increase the capacity of its mainline between the Laramie compressor station and Cheyenne compressor station, and will allow it to deliver gas received from the expansion of the Powder River lateral to Trailblazer or any other pipeline connected to it at the Cheyenne compressor station.

Both compression expansions, according to WIC, address the need for additional transportation capacity out of the Powder River area of Wyoming.

Separately, WIC and CIG also got FERC clearance to construct delivery point facilities in order for Public Service Company to receive gas supplies from the Powder River area of Wyoming for local distribution [CP98-327]. WIC seeks to build a 12-inch orifice meter run and associated facilities, known as the Owl Creek Meter Station, and CIG proposes to build a 16-inch orifice and associated facilities, known as the Lodgepole Meter Station These facilities and Public Service Company's Chalk Bluffs Meter Station will be connected by an interconnecting pipeline. The two proposed meter stations will each have a capacity of 255 MMcf/d.

Susan Parker

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