With one Commissioner referring to it as a "king-like" endeavor, FERC Thursday issued certificates for three projects that will make up the westernmost end of Rockies Express Pipeline LLC's proposed $4 billion 1,663-mile pipeline that would transport Rocky Mountain natural gas to Midwest and eastern markets.

The projects proposed by Rockies Express, TransColorado Gas Transmission and Questar Overthrust Pipeline call for the construction and operation of approximately 795.6 miles of pipeline and a total of 237,320 horsepower of new compression [CP06-354, CP06-401 and CP06-423]. When completed, the western-phase project would transport up to 1.5 Bcf/d.

As the main part of the project, Rockies Express plans to construct about 712.7 miles of 42-inch diameter pipeline in various counties in Colorado, Wyoming, Nebraska, Kansas and Missouri, as well as about 5.3 miles of 24-inch diameter pipeline lateral in Sweetwater and Carbon counties, WY. It also proposes to install new compressor stations in Colorado, Wyoming, Nebraska and Missouri, and install additional compression at two existing stations in Colorado and Wyoming. This portion of the project is known as REX-West.

The REX-West leg would transport gas from the Cheyenne Hub in Weld County, CO, to its terminus at the Panhandle Eastern Pipe Line interconnect in Audrain County, MO, where it would ship to various markets in the Midwest including Kansas City, St. Louis and Chicago.

Some industry experts have noted that the Rockies Express Pipeline could muscle in on supplies from other regions in the market. Earlier this month, Bentek Energy said that when REX-West goes into service in early 2008, it could put pipelines transporting natural gas from the Anadarko and Permian basins at a distinct disadvantage (see Daily GPI, April 12).

Questar Overthrust proposes to build 77.2 miles of 36-inch diameter pipeline in Sweetwater County and two new compressor stations in Wyoming as part of its Wamsutter expansion. Overthrust has entered into an agreement with Rockies Express to supply firm transportation capacity of 625,000 Dth/d from the Opal Hub to the Wamsutter Hub in Sweetwater County. Rockies Express would then transport these volumes through the Entrega Pipeline and REX-West system for delivery to Midwest markets.

TransColorado's Blanco-to-Meeker project calls for the installation of about 1,300 feet of 24-inch diameter pipeline and 60 feet of 16-inch diameter pipeline in San Juan, NM, along with two new compressor stations in Colorado and New Mexico and additional compression at an existing station in New Mexico. This would enable shippers on the TransColorado system to transport San Juan Basin gas from the Blanco Hub in New Mexico north through Colorado and then via the REX-West system for delivery to Midwest markets.

The sponsors of the Rockies Express Pipeline are Kinder Morgan, Sempra Pipelines & Storage and ConocoPhillips. The largest part of the western phase of the Rockies Express system, REX-West, is scheduled to be in operation in early 2008. The eastern portion, REX-East, is targeted for in-service a year later. The REX-East leg would extend 622 miles from Missouri, where the REX-West segment ends, to Monroe County, OH.

"This pipeline is one of the largest greenfield projects the Commission has certificated in recent years...The Rocky Mountain region is a major supply source for the Lower 48 states and its production continues to grow," said FERC Chairman Joseph Kelliher.

Natural gas production in the Rocky Mountains, which includes Colorado, Utah and Montana, has increased 33% to 3.1 Tcf from 2.3 Tcf between 2001 and the end of 2005, while production from the Gulf of Mexico has declined by 38% during the same period, staff said.

In 2001, the Gulf of Mexico accounted for one-fourth of U.S. gas production, and the Rockies accounted for a little less than 12%. But each region contributed 17% of total U.S. production by the end of 2005, FERC staff noted.

Similarly, proven natural gas reserves in the Rockies increased by more than 25% during the four-year period and now account for about 22% of total proven U.S. reserves, while Gulf reserves fell by almost 36% and now account for 8.3% of domestic proven reserves, according to FERC.

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