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El Paso, Kern River Plan Emergency Pipeline Expansions

El Paso, Kern River Plan Emergency Pipeline Expansions

The California energy crisis attracted two emergency gas pipeline projects last week, one from Kern River Gas Transmission and another from El Paso Natural Gas. Together the projects would add 365 MMcf/d of firm transportation to the California market by late summer.

In response to the "urgent" need for additional gas supplies to serve California's electric generation markets this summer, Kern River Gas Transmission held an open season last week for 135,000 Dth/d firm transportation service expected to be available by July 1.

"It would mean the fast track through FERC and getting all the environmental permits in three-and-a-half months," said spokeswoman Bev Chipman. "It would be quicker than ever before. We've already spoken with FERC. They are very interested, and we are very interested to entertain this possibility."

FERC Chairman Curt Hebert told the House Energy and Air Quality subcommittee last week that the Commission was committed to moving rapidly on any projects designed to move gas to California.

Kern River, which already has one expansion on file and another on the way, is proposing this project as an emergency solution to California's power crisis. The $81 million project would be finalized by April 2 based on whether the necessary permits and licenses for construction have been obtained. Kern could cancel the project if expansion capacity is not fully subscribed.

A portion of the emergency facilities could be incorporated into Kern River's 2002 California Expansion Project, which is currently on file at FERC, or its 2003 New Generation Expansion Project, which recently underwent an open season. Kern River said the project would include modifications to three existing compressor stations, installation of three new compressor stations and expansion of a meter station. Several temporary facility installations would be removed once the other two permanent expansions were in place and in service.

"In response to FERC and to the state of California we have located available compression equipment that we could have on site nearly immediately, and we've come up with a proposal to place those compression units on the very same sites we will be using for our permanent expansions," said Kirk Morgan, director of business development for Williams Gas Pipeline West, which operates Kern River. "FERC already has an application in front of them that deals with the site locations. These are different units so there are different air quality impacts, but we're hoping that those sites can be permitted very expeditiously....."

Meanwhile following through on a FERC request to expand its pipeline system to California, El Paso Natural Gas filed a plan last Thursday to add 230 MMcf/d of firm capacity by Aug. 31 to help alleviate the 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.

Initially, El Paso had proposed its so-called Line 2000 project as a loop line to replace compression that it planned to remove from its system, and not as a system expansion. But the pipeline told FERC that there has been a "radical change in the dynamics of the natural-gas market in California." The energy crisis continues in the region and there is an immediate need for additional volumes of gas to serve growing electric generation, the pipeline said.

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.

However, it is seeking FERC approval of a project that has no signed contracts with customers for the proposed capacity. El Paso plans to use the extra capacity to create system flexibility to meet peak gas demand initially. The pipeline mentioned that it plans to take a significant amount of capacity out of service for testing this spring because of the explosion that occurred on its system last fall. As a result the extra capacity is needed "as quickly as possible."

Rocco Canonica

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