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Kern River Puts Expansion on Hold

Kern River Puts Expansion on Hold

While Questar continues preliminary work on its California-bound mainline, Kern River Pipeline has put its plans to run a new large-diameter pipeline into Southern California on hold, awaiting regulatory action from the dilatory California Public Utilities Commission.

"It is just a watch-and-wait situation" for us right now, said a spokesperson for Kern River, a subsidiary of Williams. The project has been "put on hold in order to wait and see what develops in California" where state officials are in the midst of a two-year effort to restructure the natural gas industry.

This spring Kern River officials said they had received expressions of interest from large industrial customers equating to about 1 Bcf/d of supplies in and around the industrial corridors of Los Angeles County and at the port city of Long Beach. In the meantime, Southern California Gas has pushed for state regulatory and legislative changes that would make it harder for competing pipelines to take away some of the gas utility's largest customers. Those proposals will not be acted upon until later this year.

Nevertheless, a second proposal for a new interstate pipeline into California by Salt Lake City-based Questar is moving ahead with a slightly delayed schedule, according to its spokesperson. Called the Southern Trails Pipeline, Questar has an application with FERC to convert the 700-mile former ARCO oil pipeline from the northwest corner of New Mexico into Long Beach to carry 120-130 MMcf/d of natural gas.

The spokesperson indicated that Questar expected to have its first major contracts for the new pipeline ready to announce in the next few months. The firm is in the midst of completing an environmental impact report and other regulatory matters, but is pointing toward beginning construction in the spring of next year. It plans to add seven compression stations for natural gas transmission and make other modifications in the 16-inch-diameter pipeline.

"We're going through the same process with FERC in terms of environmental assessment as we would have gone through to build a whole new pipeline," the Questar spokesperson said.

Constructed in 1957 to carry crude oil, the former ARCO oil system includes Lines 90, 91 and 92, which Questar purchased last year for $40 million.

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