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FERC OKs Partial Start-up for REX East-to-West Expansion

FERC gave Rockies Express Pipeline LLC (REX) the go-ahead Monday to begin service on part of its Zone 3 capacity enhancement project, which when fully operational will add 800 MMcf/d of east-to-west capacity to the pipeline.

The Federal Energy Regulatory Commission issued an order Monday authorizing REX to begin service at the Columbus Compressor Station in Pickaway County, OH; at the St. Paul Compressor Station in Decatur County, IN; and at additional units at the Chandlersville Compressor Station in Muskingum County, OH [CP15-137] .

According to NGI’s REX Zone 3 Tracker, the 1,698-mile pipeline’s east-to-west flows out of the Appalachian Basin have been maxed out at around 1.8 Bcf/d. The Zone 3 Capacity Enhancement will bring total westbound flows to 2.6 Bcf/d.

That 800 MMcf/d of additional capacity is completely sold out, management for backer Tallgrass Energy Partners LP said during the partnership’s 3Q2016 conference call earlier this month.

Tallgrass spokeswoman Phyllis Hammond told NGI Monday that the project remains on track to be completed by the end of the year. As new capacity comes online and becomes available, the operator will post details to its electronic bulletin board, she said.

CEO David Dehaemers hinted during the Tallgrass third quarter call that REX could “have some pleasant upside surprises” in terms of the capacity it can offer to constrained producers trying to move gas out of East Ohio.

“We’re able to do things with REX where perhaps it gives us more than the designed capacity, so we’re always looking to optimize our assets, and we feel really good about our opportunities there,” Dehaemers said.

COO Bill Moler added that  “because the Btus that are coming into REX are higher...you can get additional dekatherms through that facility, and so there is some thought that we have the horsepower availability and some thought that we have some Btu growth, and that’s what that’s coming from.”

REX stretches from the Rockies to eastern Ohio and began operation as a west-to-east system in 2009. Since the emergence of the Marcellus and Utica shales, it has become a crucial east-to-west takeaway path for Appalachian producers looking to access markets in the Midwest.

Tallgrass and its privately held affiliate, Tallgrass Development, own a combined 75% stake in REX, with Phillips 66 owning the remaining 25% interest. 

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