Questar Gets Go-Ahead on Utah Pipe Expansion

FERC last week issued a certificate to Questar Pipeline to begin building its 75-mile, 272,000 Dth/d pipeline loop running from northeastern Utah to the north central part of the state. The proposed facilities would transport to western markets the growing coal-seam natural gas production near Price, UT, and the volumes delivered to Questar from Colorado Interstate Gas's (CIG) Uinta Basin Lateral at Natural Buttes.

Although Questar amended the so-called M.L. No. 104 project after FERC had issued a preliminary determination (PD) last December, the Commission said it still found the pipeline loop to be in the "public convenience and necessity." Further, it noted the pipeline expansion "has the potential to help alleviate the critical energy shortage in the western United States."

The amended application, which Questar filed last March, made several physical changes to the project, such as increasing compression and boosting pipe-yield strength and thickness. Questar also changed the terms of its partnership deal with CIG, agreeing to sell CIG a 31.3%, rather than a 50%, undivided interest in the M.L. No. 104 project. CIG will then lease its undivided interest in the project back to Questar, which will have full operational rights. Lastly, CIG Resources Co.'s capacity commitment on the project has been reduced to 94,000 Dth/d from 150,000 Dth/d.

As it did in its PD order on the project, the Commission rejected Questar's request for pre-approval of rolled-in rate treatment [CP00-68]. However, FERC indicated that Questar could seek rolled-in rates in a future rate case in the event there are "material changes in circumstances that would eliminate any potential for subsidization from existing shippers."

In its original application, Questar noted that its existing M.L. Nos. 40 and 41 transportation systems were being overtaxed due to the growth in development of coal-seam gas reserves in Price and the rising peak-day requirements of gas customers along the Wasatch Front in north-central Utah. The M.L. No. 104 expansion seeks to solve that problem, looping the westernmost segment of Questar's M.L. No. 40 line and all of the M.L. No. 41 line. It would extend from Price, UT, to an interconnection with Kern River Gas Transmission near Elberta, UT.

Besides CIG Resources, Questar has signed service agreements with four other customers, fully subscribing the entire capacity of its project. They are: Questar Gas Co., a 10-year agreement for 50,000 Dth/d; Questar Gas, a five-year agreement for 50,000 Dth/d; Texaco Natural Gas Inc., a five-year agreement for 20,000 Dth/d; Texaco Natural Gas, a 10-year agreement for 25,375 Dth/d; Dominion Exploration and Production Inc., 17,625 Dth/d; and Phillips Gas Marketing Co., 15,000 Dth/d.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.