Colorado Interstate Gas Co. (CIG) has filed an application at FERC seeking authorization to build an expansion of its existing High Plains System to provide additional takeaway capacity from the Denver-Julesburg (DJ) Basin to the Cheyenne Hub in Weld County, CO.
CIG proposes to build an eight-mile lateral (Lancaster Lateral) to connect natural gas production and processing facilities in the DJ Basin with the 164-mile High Plains Project in Adams, Morgan and Weld counties. The DJ Basin, which is centered in eastern Colorado and extends into southeastern Wyoming, western Nebraska and western Kansas, continues to be a prolific oil and gas production basin.
The lateral would initially be capable of transporting 225,000 Dth/d, with this potentially rising to 600,000 Dth/d over time. The High Plains System currently has a design capacity of approximately 899,000 Dth/d, according to the application [CP12-496].
CIG asked the Federal Energy Regulatory Commission to approve the $25 million project in time to allow it to go into service in October 2013. It further requested that the Commission "progressively commission" certain meter state facilities by June 30, 2013 so it could provide interruptible transportation service to coincide with the anticipated in-service date of a new processing plant.
Because gas produced in the basin has a high liquids content, Anadarko Energy Services Co. and DCP Midstream Marketing LLC are constructing cryogenic gas processing facilities in Weld County to remove the liquids from the gas stream to meet pipeline specifications before it can be transported for customer end-use.
Both Anadarko and DCP have signed agreements for service on the High Plains System. Anadarko has executed a 10-year agreement for a maximum daily quantity (MDQ) of 225,000 Dth/d for the first year and 450,000 Dth/d in later years. DCP executed a 10-year agreement for an initial MDQ of 25,000 Dth/d for the first year and 50,000 Dth/d in later years.
DJ Basin producers Anadarko and Noble Energy, which is DCP's largest processing customer in the basin, recently said they collectively anticipate spending more than $2 billion this year in drilling oil wells in the basin. Producers in the DJ Basin predict that total associated gas production from oil drilling activities will double over the next five years, resulting in more than 0.5 Bcf/d of incremental gas production, CIG told FERC in its application.
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