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El Paso Tests Market for Lateral

El Paso Tests Market for Lateral

El Paso sent out a request last week for potential shippers on its proposed Yuma Lateral to get their plans in order. The project, which will serve new gas-fired power generation in Sonora and Baja California, Mexico, includes a broad range of possibilities in terms of size and location.

So far, the project parameters suggested have ranged from a 40,000 MMBtu/d project to 470,000 MMBtu/d with different delivery pressures, different delivery points and various border crossings, said El Paso's Jerry Strange.

In preparation for the Comision Federal de Electricidad scheduled bidding on new power generation later this month, El Paso has prepared a number of different case studies showing various incremental rates for firm transportation on the project. The case studies are based on a delivery pressure at the U.S.-Mexico border of between 500 psig and 700 psig. Some are based on proposed delivery point to be located south of Yuma, AZ, near San Luis Rio Colorado, Sonora. Others are for deliveries to the international boundary at a proposed delivery point west of Yuma in the direction of Mexicali, Baja California Norte.

The average pipeline length in all cases is about 94 miles and the costs range from $61 million to $143 million.

Southwest Gas Corp. basically ignored El Paso's open season last year on the Yuma lateral, according to spokesman for the Las Vegas-based utility. "If it ever becomes a reality, there is a possibility we could use some of the added gas supplies to meet some of our future growth needs in Arizona."

Southwest thinks that the project is very expensive, particularly without an anchor load, such as merchant electric generating plants. Southwest has no plan to take an equity interest in the project, the spokesperson said.

"At this time we don't have those additional capacity needs. Right now El Paso's existing line to us is meeting all of our needs." For more information on the Yuma project contact Jerry Strange at (915) 496-3139.

Richard Nemec

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