FERC approved an application from Transwestern Pipeline Co. LLC to extend its pipeline system 260 miles from its mainline in Yavapai County, AZ, to delivery points in the growing Phoenix market and to build 25 miles of pipeline looping on its existing San Juan Lateral.

The Phoenix expansion project will deliver 500 MMcf/d to the Phoenix area, which currently is served only by competitor El Paso Natural Gas. It will provide Arizona utilities access to more San Juan Basin gas production and give Transwestern's existing shippers, many of whom are marketers and producers, access to additional markets for natural gas.

The project will be constructed in two overlapping phases. The first phase will involve the construction of the Phoenix Lateral, customer laterals and associated aboveground facilities; the second phase will involve the construction of the San Juan Lateral loops and compressor station upgrades. Transwestern estimates that it will spend $72 million for looping its existing San Juan Lateral and $640 million for the Phoenix Lateral, including the anticipated cost to acquire capacity on the East Valley Lateral.

The proposed Phoenix Lateral will commence at Transwestern's existing mainline near Ash Fork in Yavapai County and terminate at an interconnection with the East Valley Lateral near Coolidge in Pinal County, AZ. Transwestern plans to construct 95 miles of 42-inch diameter pipeline, 164 miles of 36-inch diameter pipeline, 12 delivery stations, customer laterals and three taps for future interconnects along the length of the pipeline.

Following a December 2004 open season, Transwestern executed precedent agreements for firm service with five prospective customers -- Salt River, Arizona Public Service Co., Southwest Gas Corp., UNS Gas Inc. and Gila River Power LP -- representing 74% of the capacity of the proposed Phoenix Lateral and 99% of the capacity of the proposed San Juan Loops A and B.

Transwestern, a Southern Union company subsidiary, extends 2,400 miles from the San Juan, Anadarko and Permian basins to the California border.

Federal Energy Regulatory Commission staff and a number of cooperating agencies had given the proposed expansion the final environmental go-ahead in September (see NGI, Sept. 24).

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