FERC turned the heat up on pipeline competition in the Coloradoand Wyoming markets up a notch or two when it gave KN WattenbergTransmission the go-ahead to start work on its proposed 109-mileFront Runner pipeline project, and gave competitors WyomingInterstate Co. (WIC) and Colorado Interstate Gas (CIG) the greenlight to carry out the construction of new compression and meteringfacilities.

KN Wattenberg’s proposed Front Runner project would competedirectly with the Public Service Company of Colorado’s 53-mileFront Range pipeline project, which has already been approved bythe Colorado Public Utilities Commission and is under construction.Public Service, which is loosely connected to WIC/CIG, is an LDCserving customers in Colorado. Both pipeline projects are in a raceto serve a growing Denver market.

Specifically, KN Wattenberg plans to build 56 miles of 16- and24-inch pipe from near Rockport, CO, south to Greeley where it thenwill build about 19 miles of smaller delivery and supply laterals.It also plans to acquire an existing 34-mile pipeline fromaffiliate KN Gas Gathering that extends from Greeley south to theDenver metropolitan area. When both segments are combined, thepipeline will have a design capacity of 254 MMcf/d, and will carrygas north-to-south from the Rockport receipt point to deliverypoints in the Denver market [CP-49-001]. KN Wattenberg says it isshooting for the new pipeline to be in operation either late thisyear or early 1999.

In approving the Front Runner project, the Commission ordernoted it would “assure that gas produced in Wyoming will be able toreach markets in Colorado, offer a means for gas volumes producedin Colorado’s Denver-Julesberg Basin to reach new out-of-statemarkets, and contribute to the development of the Rockport Hub.”Moreover, KN Wattenberg argued that its project would introducepipeline-on-pipeline competition for the first time into a regionthat it claims has long been dominated by CIG. FERC, over theobjections of Public Service Company, granted KN Wattenberg’srequest for an optional certificate to build the new line, whichmeans it isn’t required to show evidence of market support[CP98-49].

The Front Runner line would parallel Public Service Company ofColorado’s Front Range project, which also would extend fromRockport into the Denver market. KN Wattenberg strongly protestedthe competing Front Range line, claiming that it and the WIC/CIGcompression project, which FERC approved last week, were a single,integrated project that was intentionally bifurcated so that theFront Range project could win quick approval from the Colorado PUCand “leapfrog” KN Wattenberg’s Front Runner pipeline. This, KNWattenberg argued, would allow CIG to maintain its hold over theColorado gas market. FERC rejected KN Wattenberg’s complaint butlast week was asked to reconsider [CP98-271].

Public Service and WIC/CIG are connected in that their parentcompanies own an equal interest in Wyco Development, which will ownthe 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 toconstruct a 4,680 hp compressor unit at its existing Laramiecompressor station in Wyoming [CP98-128]. The unit will connectCIG’s 100-mile Powder River Basin lateral and WIC’s mainline,creating about 49 MDth/d of additional transportation capacity onthe lateral [CP98-128]. WIC proposes to lease the capacity from CIGto use as an additional supply leg on its existing system. It alsoplans to build a 2,700 hp compressor unit at its existing Cheyennecompressor station near Rockport. This, it says, will increase thecapacity of its mainline between the Laramie compressor station andCheyenne compressor station, and will allow it to deliver gasreceived from the expansion of the Powder River lateral toTrailblazer or any other pipeline connected to it at the Cheyennecompressor station.

Both compression expansions, according to WIC, address the needfor additional transportation capacity out of the Powder River areaof Wyoming.

Separately, WIC and CIG also got FERC clearance to constructdelivery point facilities in order for Public Service Company toreceive gas supplies from the Powder River area of Wyoming forlocal distribution [CP98-327]. WIC seeks to build a 12-inch orificemeter run and associated facilities, known as the Owl Creek MeterStation, and CIG proposes to build a 16-inch orifice and associatedfacilities, known as the Lodgepole Meter Station These facilitiesand Public Service Company’s Chalk Bluffs Meter Station will beconnected by an interconnecting pipeline. The two proposed meterstations will each have a capacity of 255 MMcf/d.

Susan Parker

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