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TW Plans to Add 50 MMcf/d to San Juan Lateral

TW Plans to Add 50 MMcf/d to San Juan Lateral

Transwestern Pipeline has filed an application with FERC to build a new 10,000 hp compressor station near Thoreau, NM, off of its San Juan Lateral and to add facilities to its Bloomfield and La Plata compressor stations. The $11.6 million project will provide an additional 50 MMcf/d of firm transportation service on the San Juan Lateral downstream of the Bloomfield compressor station and will allow Transwestern to operate its mainline at its certificated capacity of 1.1 Bcf/d on a firm basis.

Transwestern said all of its existing capacity is fully subscribed and its ability to provide incremental capacity is limited. It held an open season in November and December 1998 and received requests from 17 shippers for 1.2 Bcf/d of incremental capacity. But so far it has signed precedent agreements with shippers for only 25,000 Dth/d of the new capacity on the San Juan Lateral (50% of the proposed additions) and for 25,000 Dth/d of the new capacity on the mainline west to the California border (36% of the new additions). Transwestern said it is continuing to negotiate with other interested parties for the remainder of the proposed capacity and will file additional precedent agreements with shippers when they are signed.

Transwestern has agreed to charge discounted rates for the incremental capacity, but said it expects to receive revenues in excess of the incremental cost of service of the proposed expansion once all of the capacity is under contract.

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