El Paso Corp. last week launched a binding open season for its proposed Ruby Pipeline LLC, which would transport natural gas from the Rocky Mountain basins to the West Coast. It also kicked off binding open seasons for Rockies capacity on its Wyoming Interstate Co. Ltd. (WIC) and Colorado Interstate Gas Co. (CIG) pipeline systems.

The open season for Ruby Pipeline will extend through April 18. The open season for WIC capacity upstream of the Opal Hub in Wyoming -- which includes transportation paths from the Uinta and Piceance basins and the Cheyenne Hub -- will conclude March 21. The open season for CIG capacity from the Raton Basin to the Opal Hub is scheduled to conclude March 20. El Paso Pipeline Partners LP, El Paso's master limited partnership, owns a 100% stake in WIC and a 10% interest in CIG.

"We have two goals in these simultaneous open seasons," said Tom Price, vice president of marketing and business development for El Paso's western pipeline group. "First, we want to continue to alleviate constraints on moving Rocky Mountain natural gas to consumers, generally. Second, we want to provide shippers with a greater array of options to move gas supplies to Opal and then on to demand regions in the western United States via the Ruby Pipeline."

Ruby Pipeline also has executed long-term precedent agreements with two more shippers, which brings the total long-term capacity commitments on the proposed pipe to 650,000 Dth/d, El Paso said. The proposed 680-mile 42-inch diameter interstate pipeline would begin at the Opal Hub in Wyoming and terminate at the Malin, OR, interconnect near California's northern border (see NGI, Dec. 10, 2007).

In December PG&E Corp. signed a letter of intent to acquire a 25.5% interest in the pipe, and it inked a precedent agreement for 375,000 Dth of long-term transportation capacity for 15 years (see NGI, Jan. 7, 2008). The Bear Stearns Companies Inc.'s Bear Energy LP also said it would become an initial shipper on the proposed pipe (see NGI, Dec. 10, 2007). Details of the latest agreements were not disclosed.

Ruby is expected to have an initial design capacity of 1.2 Bcf/d, which would be expandable to 2 Bcf/d. Subject to Federal Energy Regulatory Commission and other regulatory approvals, and after obtaining necessary customer commitments, the Ruby Pipeline is expected to be in service in early 2011.

More information on the Ruby project and open season is available at www.rubypipeline.com. Information on the WIC and CIG open seasons is available at www.elpaso.com.

In related news last week El Paso reported that it pumped up its production in 2007 and built its total natural gas-weighted proved reserves base to 3.1 Tcfe. About 72% of El Paso's year-end 2007 proved reserves were considered proved developed; 80% were gas.

The company reported that it replaced 252% of its consolidated reserves. Proved reserves included 256 Bcfe related to its 48.8% stake in Four Star Oil & Gas Co. El Paso last year also added 357 Bcfe of reserves through the drillbit and acquired 357 Bcfe. Another 43 Bcfe was added through price revisions. El Paso's proved reserves at the end of 2006 totaled 2.4 Tcfe.

"We hit all of our major goals, including an 8% production increase, growth of our proved reserves, and improvement in per-unit lease operating expense and cash flow," said Brent Smolik, president of El Paso Exploration & Production (E&P) Co.

El Paso E&P's 2007 capital expenditures totaled $2.59 billion, which included $1.18 billion for acquisitions and $230 million of international expenditures. Replacement costs from consolidated domestic operations were $3.26/Mcfe.

The company is scheduled to report its 4Q2007 earnings this week.

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