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Northwest Gets OK for Piceance Basin Project

FERC has approved construction and operation of a 24-inch diameter pipeline by Northwest Pipeline GP in Colorado to carry gas from the Piceance Basin to Northwest's on-system and off-system markets, Northwest parent Williams said Monday.

The 27.4-mile pipeline and related facilities, known as the Colorado Hub Connection, will connect the Meeker/White River hub, a regional production-area hub, with Northwest's existing mainline south of Rangely, CO. The project will provide approximately 360,000 Dth/d of firm transportation service on Northwest's mainline to delivery points as far south as Ignacio, CO. At Ignacio Northwest interconnects with El Paso Natural Gas and Transwestern Pipeline Co.

Questar Pipeline Co. and Enterprise Products Operating LLC began operating their joint venture 2.5 Bcf/d White River Hub in Rio Blanco County, CO, last December (see Daily GPI, Dec. 18, 2008).

"The Colorado Hub is a strategic project that will allow Northwest to connect the Piceance Basin supplies with markets in the western U.S. and to subscribe existing mainline capacity on a long-term basis," said Phil Wright, president of Williams' gas pipeline business.

Williams anticipates starting construction on the project in May; the pipeline is expected to be in service by Nov. 1. The estimated cost of the project is $60 million.

Among producers active in the Piceance Basin is ExxonMobil, which announced its 300,000-acre development in northwestern Colorado in September 2007 (see Daily GPI, Sept. 10, 2007). ExxonMobil has projected that it will produce 1 Bcf/d from the Piceance, well ahead of the 55 MMcf/d it was producing there in 2007 (see Daily GPI, March 6).

Late last year the Federal Energy Regulatory Commission issued El Paso's Wyoming Interstate Co. Ltd. pipeline a certificate for a compression expansion to add nearly 230,000 Dth/d of takeaway capacity on its Piceance Lateral (see Daily GPI, Dec 5, 2008).

In August 2007 Northwest conducted an open season for the Colorado Hub Connection (see Daily GPI, Aug. 6, 2007) and filed an application for a FERC certificate in September 2008. Williams Pipeline Partners LP owns a 35% interest in Northwest Pipeline GP.

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