Questar Pipeline Co. and Colorado Interstate Gas (CIG) havesigned an agreement to jointly own a proposed 75-mile interstatenatural gas pipeline extending from the Price Area in eastern Utahto a proposed interconnect with Kern River Gas Transmission Co.(Kern River) near Elberta, UT. The line would have a minimumcapacity of 250,000 Dth/d and would begin service in winter20001-2002.

This proposed expansion of the Questar pipeline, referred to asthe Questar M.L. 40/41 Loop, would parallel an existing Questarpipeline from Price to the Wasatch Front and tie into Kern River.The project is designed to deliver increasing production from theUinta Basin to markets along the Wasatch Front near Salt Lake Cityand to California through Kern River.

“This agreement makes a lot of sense for both companies,” saidD.N. Rose, president and CEO, Questar Pipeline. “Originally, wewere proposing two separate projects. Questar Pipeline proposed itsloop line to meet market needs in Utah. CIG was proposing to builda similar line to provide new market outlets for the increasingnatural gas production tied to its system. Working together tobuild one line enhances both companies’ ability to meet marketneeds and reduces construction-related and environmental impacts onthe private and public lands.” Rose said that in addition to thissignificant transportation opportunity, the agreement provides forother growth opportunities with CIG.

Questar’s Shelley Wright, supervisor of marketing, said theWasatch Front market area is growing 2-4%/year. In addition shesaid coal-seam gas production is expected to double to about 300MMcf/d in the Uinta over the next few years, lead by a field nearPrice, UT, being produced by Dominion Resources, River Gas ofAlabama and Texaco. Currently the production out of that fieldtoday is at 150 MMcf/d but it’s expected to peak at 300 MMcf/d. Shenoted a new environmental impact statement has paved the way foranother wave of drilling in the Uinta next year.

The proposed pipeline will be constructed as a 24-inch diameter,75-mile pipeline, with a maximum operating pressure of 1,400 poundsper square inch. The companies already have held and open seasonfor the project and expect to have contracts signed for 250,000MMBtu/d by the time they file an application with FERC later thisyear.

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