Medicine Bow Gets Preliminary Nod from FERC
Wyoming Interstate's proposed $78 million Medicine Bow Lateral
in the Powder River Basin won preliminary approval from FERC last
week. In a draft order, the Commission said the pipeline, which
would provide 260,000 Dth/d of new firm take-away transportation
capacity for Wyoming producers, would be in the public interest,
subject to a final order following environmental review.
WIC submitted precedent agreements signed with six
non-affiliated shippers for terms ranging from 10 to 13 years. The
agreements call for 143,000 Dth of firm transportation capacity
initially, increasing to 368,000 Dth/d in years four through 10 and
decreasing thereafter. WIC intends to file for an expansion of the
lateral beyond 260,000 Dth/d at a later date.
The Commission approved WIC's proposed negotiated rate, which
would be $0.172/Dth, including reservation and commodity
components, on a 100% load factor basis. The proposed rate would
decrease to $0.159/Dth plus surcharges once total volume on the
line reaches 250,000 Dth/d.
The proposed pipeline would extend 150 miles off of WIC's
mainline into the Powder River Basin in northeastern Wyoming. It
would connect with a third party carbon dioxide extraction plant
and a non-jurisdictional gathering system in the basin.
Coal-bed methane production in the Powder River is expected to
grow rapidly over the next decade. The basin holds an estimated 15
Tcf in recoverable gas reserves.
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