Even though construction of the intrastate Front Range Pipelinealready is in progress and work on theFront Runner Pipeline isexpected to start “fairly soon,” the sponsors have disclosed thatthey still are continuing “discussions” to possibly combine the tworival projects into a single pipeline to serve the growing Coloradogas markets.

“I wouldn’t call them negotiations. They’re discussions at thispoint. There may be something that will come out of them. But Ican’t really predict that,” said Mark Stutz, spokesman for KNWattenberg Transmission, sponsor of the Front Runner project. Aspokesman for Public Service Company of Colorado, a sponsor of theFront Range project, also confirmed the “on-again, off-again”discussions, but said that no agreement has been reached. The twocompanies have been engaged in various talks of one form or anotherwith respect to a joint project since 1992.

“Our preference right now, realizing that our project is[already] being constructed, is that we would be the one that wouldhold the capacity or ownership to the pipeline,” said Kurt Haeger,manager of gas supply and planning for Public Service Company. But,he noted, “We haven’t gotten to that level of discussion with KN”yet. “We’re still pretty much in the general stages of seeingexactly what their desires are and how we would satisfy them.”

In the meantime, both companies said they are proceeding withtheir respective pipeline projects. “You cannot obviously stop yourefforts to build a pipeline that we want to get in roughly midwaythrough the 1998-1999 heating season based on the fact that you mayor may not have some success with the discussions,” Stutz told NGIlast week. “If something comes out of it, then we’ll let the worldknow. Until then, we’re continuing on a parallel path with plans tobuild our pipeline.”

Construction on the 109-mile Front Runner Pipeline, which wasapproved by FERC earlier this month (See NGI, July 20), isexpected to begin by the end of the third quarter, and is targetedfor completion by either late this year or in early 1999, he said.The 254 MMcf/d pipeline would extend from the hub in Rockport, CO,through the so-called Wattenberg Field, which is located north ofDenver, into the Denver metropolitan market. It would permit KNWattenberg to bring in additional gas supplies from the RockportHub – augmenting supplies from the Wattenberg Field – to meet thegrowing needs of the Denver-area region in the winter, and to dobackhauls from the field to eastern markets (such as Kansas andNebraska) during the summer, Stutz said.

Work on the Front Range Pipeline already has started, having woncertificate approval from the Colorado Public Utilities Commission(PUC) in June. It is expected to be finished by the start of thenext winter heating season. The 269 MDth/d project essentiallywould be a “reinforcement” of Public Service Company’s currentsystem, Haeger said. It would parallel 53 miles of the existingtransportation system, which extends from the Chalk Bluffs (orRockport) Hub at the Colorado-Wyoming border to the Denver area,stopping about 35 miles north of the city.

Public Service Company’s existing pipeline already ties in withWilliams, Trailblazer and Wyoming Interstate Co. Ltd. (WIC). Withthe Front Range project, it also would interconnect with ColoradoInterstate Gas (CIG) and, depending on the outcome of the talks,possibly the southern leg of KN Energy’s Pony Express Pipeline.

“Shortly after they received their decision from the PublicUtilities Commission, Public Service Company approached KN Energy[parent of KN Wattenberg] to discuss the possibility of some typeof accommodation for the two projects,” Stutz noted. “And if youthink about it, that makes good business sense,” particularly sinceboth pipelines will follow essentially the same corridor from nearRockport to the Denver metropolitan market, will serve similar gasmarkets (principally Denver), and are at-risk projects.

An agreement to build a single pipeline project in the FrontRange region of Colorado could put an end to years of squabblingbetween KN Wattenberg, Public Service and CIG, also a sponsor ofFront Range Pipeline. “It’s an interesting business. Some daysyou’re heavy competitors with another company, and some days you’refriends,” Stutz commented.

Susan Parker

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