SoCalGas Finds Room for Further Pipeline Expansion

Under political pressure to add gas transportation capacity in the state of California, Sempra subsidiary Southern California Gas announced additional plans to expand its intrastate pipeline system. The company said it will add another 6% of capacity to its previously announced project, bringing the proposed expansion to an 11% increase in capacity or about 200 MMcf/d.

Citing unprecedented increases in demand for natural gas over the past six months fueled by the state's electricity crisis, SoCalGas announced a $40 million expansion yesterday of its core transmission pipeline system in the heart of Southern California. SoCal will expand what it calls its Kramer pipeline, which is northeast of Los Angeles, by 6%, adding to the expansion plans announced in March (see NGI, March 26 and March 29). All of its expansion plans are expected to be completed by year end.

The latest expansion will be a 32-mile link of its transmission station in Adelanto in the high desert about 100 miles northeast of Los Angeles with the Kern River-Mojave pipeline at Kramer Junction.

"The Kramer project represents a cost-effective expansion to our system that will provide long-term increased access for all of our customers to competitively priced gas supply from the Rocky Mountain region," said SoCalGas Chairman Edwin A. Guiles.

Over the past nine months, utilization of the company's intrastate transmission system has increased from 75% to over 95% primarily because of the increase in the use of natural gas fueling regional power plants.

"While the state legislature and others are addressing natural gas availability and prices, we are making timely economic additions to our gas transmission system to benefit all of our customers and market participants," Guiles said.

Announcements by interstate pipeline companies to expand pipeline service to California and the unprecedented demand for natural gas for generating electricity indicate that further expansion of SoCal's system is warranted, the company added. In response, it has examined alternatives to provide additional pipeline capacity to Southern California as soon as possible. The Kramer expansion provides the fastest solution, said Guiles. Alternative expansions of this magnitude at other delivery points likely would take at least two years to complete.

In the previously announced expansion, however, SoCal expects to add 85 MMcf/d of capacity at the Wheeler Ridge connection with Kern River/Mojave, 50 MMcf/d at Needles where it connects with Transwestern and 40 MMcf/d at connections with in-state production.

The company also is proposing some adjustments to its gas storage operations that will help increase the in-state supply of natural gas by 24 Bcf. It already has on file at the CPUC plans to abandon the Montebello storage field in Los Angeles County and withdraw the 10-12 Bcf of base and working gas that remains in the field. In addition, the company is planning to drill several new wells at its Aliso Canyon and La Goleta storage fields in order to remove 14 Bcf of base gas, split evenly between the two fields, and sell it into the market.

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