The Ohio terminus of the Rockies Express Pipeline (REX) got even more popular last week as a jumping-off point to eastern markets for Rockies gas with the announcement of two more projects.
Under the Dominion Hub III Project, existing firm transportation customers of Dominion Transmission will have the opportunity to move their firm receipt rights to a planned interconnection with the REX at Clarington, OH. Customers would retain their existing delivery points to move these supplies to growing Northeast markets. The Hub III Project is a response to a growing interest in Rockies supplies by customers on the Dominion system, the pipeline said.
And National Fuel Gas Co. said it is seriously exploring the prospect of building a 324-mile pipeline to deliver Rockies gas from Ohio to the Corning, NY, market. National Fuel's project, called the "West to East Project," would be the largest ever tackled by the company. Similar to competing projects, it would deliver to New York markets the Rockies natural gas that will be transported over the 1,600-mile REX pipeline. The third and final leg of the REX pipeline, known as REX East, will end at Clarington.
"The Dominion advantage is that the Rockies pipeline will interconnect directly with the Dominion Transmission system," said Donald R. Raike, vice president-marketing and customer services. "Therefore, instead of requiring significant greenfield build, the Hub III Project will maximize the efficient use of existing pipeline infrastructure and have less impact on the environment. The Hub III Project can be in place quickly, with minimal construction, and will bolster the value of Dominion's firm transportation services."
National Fuel's proposed line, which would move up to 700,000 Dth/d, would be a link between REX and the Millennium Pipeline that is under construction, according to National Fuel's Julie Coppola Cox. And in addition to Rockies gas, she said the pipeline would tap into gas supplies from Appalachia. The company held its first open season in March of this year. It "generated very strong interest," Cox said.
"We're on that road" toward filing an application at the Federal Energy Regulatory Commission, said Cox. "We're having a number of post-open season meetings with shippers." The company anticipates that the project, which would cost up to $725 million, will be ready for operation by 2010-2011.
Subject to regulatory approval, the pipe extension could go into service in late 2010 and transport up to 1.5 million Dth/d, said joint sponsors Kinder Morgan Energy Partners, Sempra Pipelines & Storage and ConocoPhillips.
In June, Dominion said it was the first pipeline to sign firm precedent agreements to move Rockies supplies into East Coast markets as part of its Dominion Hub I Project.
The current Hub III Project design would allow approximately 300,000 Dth/d of existing firm receipt point entitlements to be transferred to the Clarington Interconnect. Interested shippers with contracted primary receipt point rights south of Valley Gate will have the opportunity to reassign these receipt point rights to the planned Clarington Interconnect. Dominion Hub III participants will continue to have secondary access to all other points on Dominion's postage stamp system, including access to Dominion South Point.
Dominion anticipates charging an incremental reservation surcharge for this receipt point realignment based on the expected cost of the required facilities. The target surcharge is currently a unit rate of 6 cents/Dth. Rates for this service will be based on the level of market participation and the final design of the project's facilities.
Other pipelines, including REX, have had the same idea -- to take Rockies gas beyond Clarington. In late October, REX launched an open season to solicit market interest for its Northeast Express Project, a 375-mile extension that would carry gas from the original REX endpoint in Clarington to Princeton, NJ (see NGI, Nov. 5).
In September, Spectra Energy's Texas Eastern Transmission completed an open season for its proposed Northern Bridge, which would carry Clarington-bound gas supplies to the Philadelphia-Camden, PA, metropolitan area (see NGI, Sept. 10). And in August, Dominion said it had secured firm, long-term commitments to receive gas from REX and deliver it to major markets in the Northeast and Mid-Atlantic through its Dominion Hub I project (see NGI, Aug. 20). According to Pace Global Energy Services, several other pipelines are shopping projects (see NGI, Oct. 29).
The first 328-mile segment of REX, which runs from the Meeker Hub in Rio Blanco County, CO, to the Wamsutter Hub in Sweetwater County, WY, and to the Cheyenne Hub in Weld County, CO, is in service and has a current capacity of 500,000 Dth/d. REX West, the segment from Cheyenne Hub to Audrain County, MO, is on schedule for an in-service date of Jan. 1. Construction on REX West is currently under way in Colorado, Wyoming, Nebraska, Kansas and Missouri. REX East, the segment from Audrain County to Clarington, is in the permitting stage and has a scheduled in-service date of Dec. 31, 2008.
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