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Pipeline Competition in Rocky Mountain Region Heats Up

Pipeline Competition in Rocky Mountain Region Heats Up

Pipeline competition in the Rockies is heating up with a new pipeline project launched last week by Williams and changes to a planned extension announced by rival Trailblazer Pipeline.

Williams is holding a non-binding open season through Sept. 21 to solicit expressions of interest for firm transportation on the proposed Western Frontier Pipeline from the Cheyenne Hub in northeastern Colorado to Hugoton Station on Williams' Central pipeline system in southwest Kansas. Western Frontier would be a major new line, extending 320 miles with 13,000 hp of compression and 540,000 Dth/d of gas transportation capacity.

"Additional natural gas supply options are vital in today's increasingly competitive energy marketplace. We believe the Western Frontier Pipeline would be a cost-effective way to bring highly-competitive supplies from the Rockies into the Midcontinent," said Kim Cocklin, vice president of customer service & rates for Williams' Central and Texas Gas systems. Williams' plans put the pipeline in service Nov. 1, 2003. The project's cost has not been finalized.

The project would compete with another expansion proposed by Trailblazer. Both are designed to bring increasing gas production primarily from the Powder River Basin to markets in the Midcontinent and Midwest regions. The Powder River is a relatively new gas play in Wyoming and Montana where shallow coal-bed methane deposits can be produced quickly and inexpensively. The basin has been estimated to hold between 10 and 30 Tcf of gas reserves. Production is expected to ramp up to more than 1 Bcf/d over the next few years.

"In essence, both get gas down into the pipelines in the Midcontinent area," said Trailblazer's Ron Brown. Trailblazer just completed an open season for an expansion/extension that was first announced in June (NGI, June 19). The project includes an expansion of its existing 436-mile pipeline system, which runs from Colorado through Southeastern Wyoming to Beatrice, NB. Trailblazer plans to install two new compressor stations, add additional horsepower at compressor station 602 and perhaps construct some 36-inch loop. In addition, the open season also was needed to test interest in a 149-mile, 24-inch diameter extension from Cheyenne, CO, to Glenrock, WY.

The extension project has been shelved, said spokesman Ron Brown. It would have interconnected with Thunder Creek Pipeline, Kinder Morgan Interstate Gas Transmission and Fort Union Pipeline at Glenrock, but plans by Colorado Interstate and Wyoming Interstate, two Coastal Corp., subsidiaries, to expand their existing Medicine Bow lateral forced the cancellation, said Brown (see related story).

"Before we were offering to do either an expansion/extension or just an expansion, but we're just going to come out with an expansion project now of 300 MMcf/d," he said. "We're shooting for December 2002.

"CIG is expanding their Medicine Bow lateral and they could have that in quicker than we could do an extension of Trailblazer," he explained. "They had an open season and were one year ahead of us so we decided to just build an expansion."

CIG announced last week it plans to loop the existing Medicine Bow lateral with 155 miles of 36-inch diameter pipe and plans to add 14,340 hp of compression at a cost of about $168 million. The additional facilities will boost capacity by 675 MMcf/d to 1.05 Bcf/d. The lateral extrends from the southern end of the Powder River Basin near Douglas, WY, to Wyoming Interstate's mainline southwest of Cheyenne, WY.

However, Brown said the market response to the Trailblazer expansion project was "huge. We've been through several rounds and people have exercised their management outs so what we're doing is going out with a new open season that is binding. That is supposed to come out this afternoon and run through Aug. 18."

Kinder Morgan Energy Partners, L.P. owns a two-thirds interest in Trailblazer, with the other one-third interest owned by Enron Trailblazer Pipeline Company, a subsidiary of Enron Corp. Trailblazer is operated by Natural Gas Pipeline Company of America (NGPL), a subsidiary of Kinder Morgan, Inc. To obtain more information on the open season, shippers should contact Ron Brown at (713) 369-9290.

A summary of Williams' Western Frontier project, including an expression of interest form, is available at http://wgpcentral.twc.com/. Additional information about the project also is available from Donny King, manager of business development for Williams' Central system, at (270) 688-6968.

Rocco Canonica

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