FERC has approved the Wyoming-to-North Dakota Bison Pipeline that would provide producers with much-needed capacity to transport natural gas from the Powder River Basin to Midwest markets.
"To the extent that the [Bison] project reduces bottlenecks and facilitates access to markets, it will encourage further development of valuable Powder River natural gas production. The project helps meet increasing demand in the Midwest market. Further, no pipeline company in Bison's market area has protested the application...Therefore we find that Bison's proposal is required by the public conveniences and necessity," said the order issued by the Federal Energy Regulatory Commission (FERC) [CP09-161].
The proposed Bison Pipeline, which received a favorable environmental review in late 2009, would extend from the prolific Powder River Basin in Wyoming to Midwestern markets such as Iowa, Wisconsin and Illinois (see NGI, Jan. 4). The 302-mile, 30-inch diameter line would run northeastward from the Dead Horse region near Gillette, WY, across the southeastern corner of Montana and into southwestern North Dakota where it would interconnect with the pipeline system of Northern Border Pipeline Co. near its Compressor Station No. 6 in Morton County, ND. The project also includes the installation of one new compressor station totaling 4,700 hp near Hettinger County, ND. The cost of the project is estimated at $609.6 million. In-service is targeted for Nov. 15.
Bison Pipeline is a limited liability company, and its sole member is TC Continental Pipeline Holdings Inc., a subsidiary of TransCanada Corp. TransCanada Northern Border Inc., also a TransCanada subsidiary, would be the operator of Bison.
According to the order, the proposed 477 MMcf/d Bison pipeline has 10-year capacity commitments with Anadarko Energy Services Co., 250 MMcf/d; Williams Gas Marketing Inc., 100 MMcf/d; Minnesota Energy Resources Corp., 51.706 MMcf/d; and MidAmerican Energy Co., 5 MMcf/d. Anadarko Energy is the project's foundation shipper (see NGI, May 19, 2008).
Even as producers continue to lay down rigs across the country due to low natural gas prices, Bison maintains that the project is designed to serve the expanding production in the Powder River Basin. "Twenty thousand wells have been drilled in this area in the last 10 years and annual additions are projected to be in the range of 2,000 wells per year," Bison said in its FERC application.
The project, with its direct connection to Northern Border, would provide a new northbound route out of the entire Rocky Mountain production region to the growing Midwest market, according to Bison.
FERC rejected Bison's proposal to use Ventura, IA, as a pricing point for activity occurring on its pipeline system. "Utilizing Ventura, IA, a point located several hundred miles downstream of Bison's system, as an index price for activity occurring on Bison would include the economic value of gas transported on Northern Border in its determination and would not be fully representative of the price of gas on an upstream pipeline such as Bison. Therefore Bison is directed to select an index price that is more representative of the value of gas on its system," the order said.
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