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Third Leg of Rockies Express Gets FERC Certificate

FERC Friday issued a certificate for the third and possibly final leg of the proposed $4.4 billion, 1,678-mile Rockies Express Pipeline (REX), which will transport Rocky Mountain natural gas to Midwest and eastern markets. The approval of the leg, known as REX-East, comes 10 days after the start-up of the entire 717-mile REX-West portion, which spans from the Cheyenne Hub in Colorado to Missouri.

The REX-East segment is a 640-mile, 42-inch diameter pipeline that will extend from an interconnection with the eastern terminus of REX-West pipeline in Audrain County, MO, through Illinois and Indiana, terminating at an interconnection with three pipelines at the Clarington Hub in Monroe County, OH. The three pipeline are Dominion Transmission Inc., Dominion East Ohio and Texas Eastern Transmission. The pipeline would have the capability to deliver more than 1.8 Bcf/d of natural gas, while providing access to an additional 19 interstate and intrastate pipelines through 13 interconnection points. REX-East is expected to be fully operational by June 2009, according to REX officials.

The Federal Energy Regulatory Commission order required the REX-East project to be completed and in service within 18 months of the date of the order [CP07-208].

Officially the pipeline segment from Missouri to Ohio is the last leg of the cross-country pipeline, although REX already has held an open season for a Northeast Express extension, going from the REX line at Clarington into New Jersey. Still under negotiation is whether its eastern terminus will be Princeton or Linden, NJ (see Daily GPI, Jan. 30; Dec. 13, 2007).

The REX-East project also would include the construction and operation of other associated facilities, including two new compressor stations on REX's existing facilities in Carbon County, WY, and Phelps County, NE.

While FERC concluded that the REX-East project was needed to bring new energy supplies to market, it conditioned its approval on REX implementing 147 mitigation measures.

REX-East is the third leg of the mammoth project. The Commission authorized the first leg of the REX project (Entrega) in August 2005, with 327 miles of new pipeline and related facilities to deliver gas from Colorado and Wyoming to the Cheyenne Hub in Weld County, CO. These facilities went into service in February 2007, providing up to 1.1 Bcf/d of transportation capacity (see Daily GPI, Feb. 13, 2007).

The second segment of the pipeline (REX-West) -- the largest leg of the entire pipeline -- extends from the Cheyenne Hub to a delivery point in Missouri. The bulk of the line went into service in January, but the remainder didn't begin operation until May 20, providing up to 1.5 Bcf/d of service (see Daily GPI, May 21).

"This project, one of the largest pipelines to be constructed in the United States, is needed to meet ever-rising demand for natural gas to generate electricity and serve consumers in the Midwest and in the eastern regions of our country," said Chairman Joseph T. Kelliher.

REX is a joint venture of Kinder Morgan Energy Partners, Sempra Pipelines and Storage and ConocoPhillips and is one of the largest natural gas pipelines to be constructed in North America, according to Kinder Morgan. Binding firm commitments from creditworthy shippers have been secured for virtually all of the capacity on the pipeline, Kinder Morgan said.

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