Reflecting conditions of depressed demand and surplus supplies in the Pacific Northwest, Williams' Northwest Pipeline Co. has decided to halt plans for a 172-mile extension of 36- and 30-inch diameter pipelines that was set to provide another 500 MMcf/d of capacity into the region's Interstate 5 corridor.

Northwest Pipeline informed the Federal Energy Regulatory Commission (FERC) earlier in September that is was terminating its environmental review pre-filing process for the Blue Bridge Pipeline Project. For the past 11 months the interstate pipeline had been working to gain interest from shippers in adding pipeline capacity over the Cascade Mountain Range into the region's load centers.

While telling FERC that it still supports building added gas pipeline infrastructure, Northwest said "it is now apparent that necessary market growth to justify a project of this magnitude will not materialize until a later time than we originally contemplated" when Blue Bridge was first proposed two years ago.

The regional interstate pipeline said it plans to continue talks with potential customers, market participants and stakeholders, and eventually it could "reinitiate" the pre-filing environmental review process "if market conditions indicate that this important project should be resumed."

As originally envisioned the Blue Bridge project was supposed to provide markets in the Pacific Northwest with incremental access to low-cost natural gas from the Rocky Mountain production region through the proposed El Paso Natural Gas Ruby Pipeline project and additional gas supply from Canada through Northwest Pipeline's existing interconnection with Gas Transmission Northwest. Gas increasingly has been viewed as an important part of the region's more diversified energy portfolio.

Early this summer the natural gas industry stakeholders in the Pacific Northwest noted at a presentation to the Oregon Public Utility Commission (PUC) that supply/demand had changed significantly in the past two years (see Daily GPI, July 1).

The head of the Northwest Gas Association, Dan Kirschner, told the Oregon PUC forum that the decline in demand overall, coupled with a "surge" in supply, had changed the list of infrastructure projects in the region with at least one Rockies pipeline proposal (Sunstone) and an LNG terminal (Bradwood Landing) being shelved. "Sunstone pipeline is on indefinite suspension and is not going anywhere right now," said Kirschner, noting that El Paso's Ruby Pipeline is expected to be operable next year, but with only indirect impact on the Northwest.

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