Thunder Creek Construction Under Way
Thunder Creek Gas Services LLC, a joint venture of Devon Energy
Corp. and KN Energy, has begun construction of a 126-mile gas
gathering system in the Powder River Basin of northeast Wyoming.
The system is expected to be operational by fall at a total cost of
about $100 million.
The gathering system will consist of a 126-mile trunk line,
low-pressure field gathering systems and related CO2 removal
facilities. It will extend from Glenrock, WY, to about 12 miles
north of Gillette, WY. The 24-inch trunk line will have an initial
capacity of 450 MMcf/d. The system will deliver gas from the CO2
removal plant into the existing KN Interstate pipeline and the
Colorado Interstate Gas pipeline at Glenrock, as well as KN
Interstate's proposed Pathfinder project, and Wyoming Interstate's
proposed Medicine Bow lateral.
With its coal-bed methane and conventional gas potential, the
Powder River Basin is becoming one of the more active onshore U.S.
gas exploration areas. Thunder Creek will significantly increase
gas gathering capacity in the basin and should accelerate
development of coal-bed methane in the Powder River Basin, the
"U.S. demand for natural gas is projected to increase during the
next few years. This increase is expected to stimulate the
transformation of the high-reserve Powder River region into a top
U.S. exploration area," said Darryl Smette, Devon Energy vice
president of marketing. "We expect the Thunder Creek system to be
serving one of the largest and most exciting gas development
projects in the country."
Thunder Creek is among several projects intended to tap the
Powder River's huge reserves. In January Western Gas Resources
announced participation in Fort Union Gas Gathering LLC, which will
build a 106-mile, 24-inch diameter gathering header to gather coal
bed methane in the Powder River Basin. Western will have a 23 1/3%
interest and be the construction contractor and field operator of
the header and a gas treating facility. CMS Gas Transmission and
Storage and Enron Capital & Trade Resources each will hold a 33
1/3% interest with CMS serving as the managing member. CIG
Resources, a Coastal Corp. subsidiary, will hold a 10% interest.
The Fort Union gathering header will have an initial capacity of
about 450 MMcf/d of gas with expansion capability. The treating
facility is to be built near Glenrock, WY. Construction is to begin
in April with operation to begin on or about Sept. 1. Western and a
joint development partner control more than 800,000 gross acres in
the Powder River coal bed methane play with current production of
about 72 MMcf/d from about 300 producing wells.
Devon owns about 220,000 net acres in the Powder River Basin and
is noted for its substantial San Juan Basin coal-bed methane
development. 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 over the next five years. "We think we have a lot
of gas potential here," said Smette. "Currently there are very few
pipeline outlets for gas in this area. We see the Powder River
Basin having substantial growth."
Joe Fisher, Houston
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