Kern Plans to More than Double its Capacity to California

Illustrating the tremendous demand growth that has nearly crippled California's energy market, Kern River Gas Transmission announced a plan last week to more than double the amount of gas it transports to the state from Rocky Mountain region supply basins.

Last November, Kern River held an open season to determine interest in providing additional capacity on its system. The pipeline said it plans to file with FERC in June for a $1 billion pipeline expansion that will include looping 700 miles of its 926-mile pipeline system to California from Wyoming, adding 900 MMcf/d of firm transportation capacity.

"We knew the demand was strong, however the response was even greater than we anticipated," said Kirk Morgan, director of business development for Kern. "There is a tremendous demand for natural gas to fuel new electric generation facilities in California and Nevada. This expansion provides shippers with an economically attractive opportunity to secure additional firm year-round transportation."

The 2003 Kern River Expansion Project is just one of three projects the company has under way. Last November it filed its first expansion proposal ever with FERC, an $80 million project to add 124 MMcf/d of firm capacity by May 2002. The 2002 California Expansion Project relies largely on existing facilities with some additional compression. Earlier this month, the company announced an emergency expansion plan designed to provide immediate help to the California generation markets this summer. That project would increase the 700 MMcf/d of firm capacity on the system by 19%, but some of the new space would be incorporated into the other two proposed expansions.

"Shippers are seeking more access to natural gas from Rocky Mountain basin, where producers are aggressively stepping up production," said Morgan. "Kern River is in the right place at the right time to help bring that production to market."

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