Powder Growth Prompts Medicine Bow Expansion
Pipeline companies are having a hard time keeping up with the
rapidly growing coal-bed methane production in the Powder River
Basin. Coastal Corp.'s Wyoming Interstate Company just put its
Medicine Bow lateral into service last November and the company
already is filing plans for a second expansion, which will add
another 675,000 Dth/d of firm capacity, bringing the total to more
than 1 Bcf/d.
"WIC has moved quickly on our proposed loop of the Medicine Bow
Lateral to satisfy the requests of producers who have met with
significant success in developing the Powder River Basin," said
Colorado Interstate CEO Jon R. Whitney. CIG operates Wyoming
Interstate. "Our proposed loop will enable this prolific basin to
continue to help meet the growing national demand for natural gas."
WIC's application calls for initially increasing capacity by
675,000 Dth/d to 1,055,000 Dth/d with the potential to double that
with added compression. WIC's existing 155-mile Medicine Bow
Lateral is a 24-inch diameter line that extends from the southern
end of the basin near Douglas, WY, to WIC's mainline southwest of
Cheyenne. The proposed loop would parallel the existing line with a
new 36-inch diameter line and add 7,170 hp of compression at an
estimated cost of $160 million. Producers have committed to 556,000
Dth/d of the proposed capacity. WIC plans to have the expansion in
service in December 2001.
The Powder River Basin is the most active coal-bed methane play
in the United States. According to a report released by the Wyoming
State Geological Survey, the most recent data indicate there is 25
Tcf of recoverable gas in the basin. "This eclipses previous
estimates of recoverable gas that ranged from 9 to 12 Tcf," the
survey said. The Wyoming Oil and Gas Conservation Commission
predicts as many as 5,000 new wells will be drilled in the basin
Since 1998, WIC has spent $108 million to increase gas
transportation capacity out of the basin. On Aug. 1, WIC placed
into service additional compression that expanded capacity on the
Medicine Bow Lateral to 380,000 Dth/d from 260,000 Dth/d.
"We put the first line in and they almost immediately filled it
up," said Craig Coombs, director of project development for CIG.
"They had to pause in their drilling because they hit the capacity
of the line. Once we expanded it, drilling started again... It's
over 300,000 Dth/d today, but we are anticipating by next summer
it's going to be full. We may have a capacity [constraint at
Cheyenne]. We could have a situation next summer and next fall
before we get the loop in where the existing lateral is full and
there's no place to take the gas."
Coombs said there is sufficient takeaway capacity currently at
the Cheyenne Hub on Trailblazer, WIC, CIG, Front Range and
Williams, but that probably will not be the case relatively soon.
"In the winter you have space heating load in Denver, which absorbs
some of that volume, but I think next summer it could get very
constrained, and the year after that it could be very tough."
CIG and Williams are proposing separate greenfield pipeline
projects that would begin at Cheyenne and terminate in southwestern
Kansas on the Midcontinent pipeline grid, but those projects are
three years from being in service.
"We have to get this going and get the [COCO project] line in
soon. We should have been building this now but we're not going to
go out and spend a bunch of money without contracts so that's why
we're in this situation."
CIG is holding an open season through Oct. 6 on the COCO
Pipeline, a 400-mile pipeline extending from the Cheyenne Hub
through CIG's market area storage fields to the interconnection of
several Midcontinent pipelines near Greensburg, KS, including ANR,
Panhandle, Northern Natural, NGPL, and Williams. CIG currently
anticipates at least 500 MDth/d of transport capacity for this line
with an in-service date in late 2003. The project is similar to
Williams' Western Frontier Pipeline, which would extend to Hugoton
Station on Williams' Central pipeline system in southwest Kansas.
Trailblazer also is planning an expansion of its existing 436-mile
pipeline system, which runs from Colorado through southeastern
Wyoming to Beatrice, NB.