Making good on its word to move Rocky Mountain natural gas west, El Paso Corp. filed a right-of-way application with the Bureau of Land Management last week for the Ruby Pipeline project, a 680-mile, 42-inch diameter pipeline that would begin at the Opal Hub in Wyoming and terminate at the Malin, OR, interconnect near California's northern border. An open season is scheduled to be launched within three months, El Paso said.
The Houston-based company, which is partnering on the project with The Bear Stearns Companies Inc.'s Bear Energy LP, said Ruby would have an initial capacity of 1.2 Bcf/d and be expandable to 2 Bcf/d. Among other things, Bear Energy may become an initial shipper on the pipeline, El Paso said.
"The Ruby Pipeline connects Rocky Mountain natural gas producers with one of the most attractive natural gas demand regions in the country," said Jim Cleary, president of El Paso's Western Pipeline Group. "Ruby will provide natural gas users in Northern California, Nevada and the Pacific Northwest with competitively priced natural gas from the nation's most important growth supply region."
El Paso said it is in discussions with other prospective shippers, and subject to Federal Energy Regulatory Commission (FERC) and other regulatory approvals, Ruby Pipeline could be in service in early 2011.
"Given the production growth from the prolific Rocky Mountain region and the supply reliability objectives of the western U.S. states, the Ruby Pipeline is the right solution," said Bear Energy Managing Director Jeff Rawls.
El Paso officials had said last month they were considering a Rockies pipe project to move gas west (see NGI, Nov. 12). El Paso's Pipeline Group's Western Region now consists of five pipeline companies. The largest is El Paso Natural Gas, which extends more than 10,900 miles. The others are Colorado Interstate Gas, Wyoming Interstate Co., Cheyenne Plains and Mojave Pipeline.
In any case, the Ruby Pipeline proposal will face some competition.
Kern River Gas Transmission is holding an open season through Jan. 11 to gauge shipper interest in expanded firm transportation to Utah, Nevada or California on its pipeline system (see NGI, Nov. 5). And Spectra Energy has proposed plans to build a new Bronco Pipeline out of the Rockies to serve western markets (see NGI, Dec. 3). While Kern River delivers to Southern California, the proposed $3 billion Bronco Pipeline, with initial capacity of 1 Bcf/d, would travel more than 650 miles to a terminus on the California-Oregon border near Malin.
El Paso spokesman Richard Wheatley told NGI that "unlike some speculative projects...[such as] Spectra's Bronco project, with an open season still several months away...the Ruby project already has the support of a major partner and discussions are under way with other shippers." With a first quarter 2011 in-service date, "Ruby stands to mitigate the prospect of volatile gas basis differentials that have been experienced by Rockies' producers moving their gas to varying supply hubs and aggregation points in other parts of the United States."
Wheatley added that the pipeline group "has been extensively marketing the project since last May and on the ground doing field work since July. This makes Ruby many months ahead of others. This is significant because Ruby will be ready to begin the FERC-NEPA [National Environmental Protection Act] pre-filing process in January, making a March 2011 in-service date achievable."
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