KN, Devon Form Powder River Gathering Company
KN Energy and Devon Energy signed a letter of intent to form
Thunder Creek Gas Services and build a new $110 million, 126-mile
gas gathering system and associated facilities in the Powder River
Basin of northeast Wyoming. The 24-inch diameter gathering system
would extend between Gillette and Glenrock, WY, bringing up to 450
MMcf/d of new production to connections with multiple downstream
pipelines during the first half of 1999.
The project is just one among several other pipeline projects
designed to tap the Powder River's huge reserves. Western Gas
Resources and an affiliate of Colorado Interstate Gas have proposed
a 90-mile, 20-inch diameter gathering system and a treating
facility to bring 200 MMcf/d out of the basin. And KN, CIG and
Questar are planning new downstream interstate pipelines and
expansions that could increase access to the basin by 1.3 Bcf/d.
The basin is expected to be one of the fastest growing onshore
areas in the country over the next few years. Currently, estimates
show the Powder River Basin could hold up to 30 Tcf of gas
reserves. Production from the basin is expected to more than triple
its current 210 MMcf/d level over the next five years with the
potential to reach 1.4 Bcf/d if all the existing leases are fully
"We think we have a lot of gas potential here," said Devon's
Darryl Smette, vice president of marketing. "Currently there are
very few pipeline outlets for gas in this area. We see the Powder
River Basin having substantial growth." Devon currently owns
160,000 net acres in the basin.
©Copyright 1998 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.