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FERC Cites Compliance Violations on Rockies Express-Entrega

FERC Tuesday signaled it may be forced to issue a "stop work order" to Rockies Express Pipeline LLC (REX) if the "poor compliance record" continues during the construction of the second segment of the Entrega Pipeline project. The Entrega project, now named Rockies Express-Entrega, will be the western end of the proposed 1,663-mile Rockies Express pipeline when completed.

For the period of Jan. 10-15, "an additional 10 noncompliances were issued by the REX environmental inspectors and the joint FERC/Bureau of Land Management environmental compliance monitor. All of these noncompliances were issued for unapproved activities occurring outside the limits of the certificated construction work areas," FERC's Office of Energy Projects said in a letter to Kinder Morgan Inc., one of the partners of the Rockies Express Pipeline. The other partners are Sempra Pipelines & Storage and ConocoPhillips.

"Previous attempts to bring a halt to the noncompliances have not been successful, including teleconferences and onsite meetings between [FERC] staff and REX management in August, October and November 2006," the letter noted. The Federal Energy Regulatory Commission ordered Kinder Morgan to file in one week "an explanation of how these issues have continued to occur and what REX will do to prevent similar issues from occurring in the future."

To date, "we have not found it necessary to issue a stop work order for the construction; however, we cannot continue to see this type of noncompliance," the Commission warned.

The second segment includes 192 miles of 42-inch diameter pipeline that would extend the Rockies Express-Entrega system from Wamsutter through Carbon, Albany and Laramie Counties, WY, and Larimer County, CO, to the Cheyenne Hub, where it would interconnect with multiple downstream pipelines, including the proposed Rockies Express Pipeline.

The first segment -- a 136-mile, 36-inch diameter pipeline that extends from Meeker Hub in Rio Blanco County, CO, to Wamsutter in Sweetwater County, WY -- has been completed and went into service nearly a year ago. That portion of the line added 750 MMcf/d of firm capacity to the region, significantly boosting gas deliveries out of the Piceance Basin.

Entrega, formerly a subsidiary of EnCana Corp., built the first segment of the pipeline. However, the Rockies Express partners are constructing the second portion of the system. In addition to this part of the project, the Rockies Express line will consist of a 713-mile REX-West segment extending from the Cheyenne Hub to Audrain County, MO, and a REX-East portion that would run from Audrain County to Clarington, OH. Kinder Morgan will operate the entire Rockies Express system, which would carry as much as 2 Bcf/d to Midwest and Northeast markets.

When completed, the $4 billion pipeline would be the largest constructed in the United States in 20 years. Assuming all regulatory approvals and additional shipper commitments are received, most of the Rockies Express project is expected to be in service in mid-2009, according to Kinder Morgan.

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