El Paso Receives Requests for 9.7 Bcf/d of Capacity

In one of the largest open season tallies ever, El Paso Natural Gas reported last week that it received 127 shipper requests for a total of 9.7 Bcf/d of firm transportation capacity in its recent March open season for an expansion to California (see NGI, March 19). A total of 76 shippers requested 4.5 Bcf/d for deliveries to the California border or inside the state and a total of 51 requested 5.2 Bcf/d for deliveries to states east of California.

Perhaps understating the significance of the response, El Paso Natural Gas President Patricia Shelton said the company was "pleased. We are willing to expand our system if this strong showing of support from the marketplace results in sufficient binding commitments," she added.

During open seasons, shippers typically request far more capacity than they're willing to pay for, but the tremendous response does indicate the need for a substantial expansion. El Paso's open season allowed parties to express "non-binding" interest in transportation service. It also allowed current shippers to express their non-binding interest in relinquishing some or all of their existing capacity that might be used to serve proposed new loads. However, no current shipper indicated a desire to relinquish any of its existing capacity, El Paso said.

EL Paso has had a long-standing problem allocating capacity at its California border points and recently realigned border receipt point commitments on its system following numerous shipper complaints and a FERC order. The company also filed last week to reconfigure the receipt point rights across its entire system. The significant demand growth in the state of California along with this effort to finally rationalize capacity on its system appear to have triggered a shipper feeding frenzy.

The pipeline now will begin negotiating binding agreements with the responding parties and identifying appropriate facilities to possibly expand its system. Upon execution of firm transportation service agreements, the company will finalize the optimum facility design and then file a project with the Federal Energy Regulatory Commission. Shippers with questions should contact Jerry W. Strange, director of transportation marketing at (915) 496-3139.

Following through last month on a FERC request to expand its pipeline system, El Paso filed a plan (March 15) to add 230 MMcf/d of firm capacity to its mainline by Aug. 31 to help alleviate the current energy crisis. In an amendment to an existing application for the conversion of the Plains All American Pipeline, El Paso said it was seeking to change its crude-oil pipeline conversion project to an expansion of its existing system. El Paso made the change in response to a suggestion in January by FERC's Office of Energy Projects, which said such a modification to the project "could assist the difficult situation" now facing the California gas market. El Paso asked the Commission to give it the authority to begin cleaning and converting a large segment of the 1,088-mile crude oil pipeline by March 31, and to approve the overall expansion project by mid-April. It hopes to have the expanded capacity in operation by late August.

The Commission on Friday approved Kern River's emergency plan to add 135,000 Dth/d of firm capacity on its system (see related story this issue). El Paso is still waiting for a ruling on its project.

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