CIG Enhances Storage, Adds Pipe Along Front Range

Public Service Company of Colorado's (PSCO) abandonment of its Leyden Storage facility over the next few years has prompted a series of storage and transportation changes on Colorado Interstate Gas that are designed to replace the storage service at Leyden and meet growing demand from six other customers in Colorado. The project, which was approved by FERC last week, is expected to cost $58 million and be in service in September.

CIG received final FERC authorization to increase deliverability by 102 MMcf/d at its Fort Morgan storage facility in Morgan County, CO, abandon the Keyes reservoir at its Boehm storage facility in southwestern Kansas and reduce working gas capacity there, and build 53 miles of 24-inch diameter pipeline alongside its existing system to increase deliveries from the Cheyenne Hub in northeastern Colorado to the greater Denver area. The company also plans to add a new compressor station, the Fort Lupton station in Weld County, with 6,700 MW of compression. The changes will provide for 87 MMcf/d of additional firm capacity from Cheyenne, 52 MMcf/d from Fort Lupton and an additional 25 MMcf/d to offset reduced thermal content of gas received from CIG's Wyoming System.

CIG held several open seasons for capacity from the Cheyenne Hub to Front Range markets, resulting in long-term (10- to 15-year) contracts with three shippers--CFI Steel, Greeley Gas and UtiliCorp United--for 12,000 Dth/d, and two precedent agreements with PSCO for 85,000 Dth/d of capacity. The pipeline company also held an open season for capacity from the Cheyenne Hub to a connection with Natural Gas Pipeline Company of America in Beaver County, OK, and to a connection with Panhandle Eastern in Texas County, OK, or Kearney County, KS. Because of increasing demand on CIG's Valley Line, the City of Colorado Springs changed its primary delivery points to citygate receipt points on the line, which freed up capacity between Watkins and CIG's connections with NGPL and Panhandle. Three shippers signed up for 40,000 Dth/d: Aquila (20,000), Enron (10,000) and Pennaco (10,000).

As part of the abandonment of the Keyes reservoir, CIG will sell 600 MMcf of base gas in the Fort Morgan storage field and 5,412 MMcf of base gas from the Keyes Sand Reservoir. The recorded cost of the base gas is $150,315 and $3.7 million, respectively. CIG has proposed retaining any gains from the sale, but will discuss the issue in its recently filed rate case. Rates for the expansion capacity also will be determined in the rate case, which was filed in March.

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