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Kern River Tests Market for 2007 Expansion Project

November 29, 2004
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Kern River Tests Market for 2007 Expansion Project

Kern River Gas Transmission said it is following through on plans to test the market for interest in a 200,000-500,000 Dth/d expansion of its 1,679-mile mainline, which extends from southwestern Wyoming through Utah, Nevada and into California.

A regulatory ruling in California in September granted the state's utilities authority to negotiate for reduced amounts of capacity on El Paso Natural Gas and Transwestern Pipeline in order to seek a more diversified portfolio of capacity on other systems, such as Kern River's pipeline. Regulators also established a process for streamlined interstate pipeline capacity contract approval.

None of the gas that currently serves California's 2 Bcf/d core market comes from the northern Rockies on Kern River, despite the fact that Rocky Mountain natural gas is among the cheapest gas available. The regulatory decision gives the 1.7 Bcf/d Kern River pipeline a window of opportunity to lock up long-term agreements for existing or expansion capacity with California's utilities. Company officials previous reported that an expansion project could be accomplished with additional pipeline looping on its mainline near Salt Lake City, UT, and Las Vegas, NV (see Daily GPI, Aug. 13).

Kern River said any expansion service resulting from its open season would be available Nov. 1, 2007. If new expansion facilities are required, it plans to file an expansion application with FERC by Feb. 11, 2005.

The rates for the new service are expected to be the pipeline's applicable maximum KRF-1 2003 incremental rates for contract terms of 10 or 15 years. Kern River also offered existing firm shippers the opportunity to relinquish capacity permanently on a year-round basis if the capacity can meet the needs of new shippers requesting transportation service.

For additional details, contact Kern River's Laurie Brown at (801) 937-6410 or Kevin Billings at (801) 937- 6167, or go to: http://2003expansion.kernrivergas.com/portal/DesktopModules/ViewDocument.aspx?DocumentID=156. Any relinquished capacity agreements must be returned by Jan. 7, 2005. New capacity agreements must be returned by Jan. 14, 2005.

Salt Lake City-based Kern River Gas Transmission Co. is owned by MidAmerican Energy Holdings Co. based in Des Moines, IA.

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