Thunder Creek Gas Services LLC, a joint venture of Devon EnergyCorp. and KN Energy, has begun construction of a 126-mile gasgathering system in the Powder River Basin of northeast Wyoming.The system is expected to be operational by fall at a total cost ofabout $100 million.

The gathering system will consist of a 126-mile trunk line,low-pressure field gathering systems and related CO2 removalfacilities. It will extend from Glenrock, WY, to about 12 milesnorth of Gillette, WY. The 24-inch trunk line will have an initialcapacity of 450 MMcf/d. The system will deliver gas from the CO2removal plant into the existing KN Interstate pipeline and theColorado Interstate Gas pipeline at Glenrock, as well as KNInterstate’s proposed Pathfinder project, and Wyoming Interstate’sproposed Medicine Bow lateral.

With its coal-bed methane and conventional gas potential, thePowder River Basin is becoming one of the more active onshore U.S.gas exploration areas. Thunder Creek will significantly increasegas gathering capacity in the basin and should acceleratedevelopment of coal-bed methane in the Powder River Basin, thecompanies said.

“U.S. demand for natural gas is projected to increase during thenext few years. This increase is expected to stimulate thetransformation of the high-reserve Powder River region into a topU.S. exploration area,” said Darryl Smette, Devon Energy vicepresident of marketing. “We expect the Thunder Creek system to beserving one of the largest and most exciting gas developmentprojects in the country.”

Thunder Creek is among several projects intended to tap thePowder River’s huge reserves. In January Western Gas Resourcesannounced participation in Fort Union Gas Gathering LLC, which willbuild a 106-mile, 24-inch diameter gathering header to gather coalbed methane in the Powder River Basin. Western will have a 23 1/3%interest and be the construction contractor and field operator ofthe header and a gas treating facility. CMS Gas Transmission andStorage and Enron Capital &amp Trade Resources each will hold a 331/3% interest with CMS serving as the managing member. CIGResources, a Coastal Corp. subsidiary, will hold a 10% interest.The Fort Union gathering header will have an initial capacity ofabout 450 MMcf/d of gas with expansion capability. The treatingfacility is to be built near Glenrock, WY. Construction is to beginin April with operation to begin on or about Sept. 1. Western and ajoint development partner control more than 800,000 gross acres inthe Powder River coal bed methane play with current production ofabout 72 MMcf/d from about 300 producing wells.

Devon owns about 220,000 net acres in the Powder River Basin andis noted for its substantial San Juan Basin coal-bed methanedevelopment. Estimates show the Powder River Basin could hold up to30 Tcf of gas reserves. Production from the basin is expected tomore than triple over the next five years. “We think we have a lotof gas potential here,” said Smette. “Currently there are very fewpipeline outlets for gas in this area. We see the Powder RiverBasin having substantial growth.”

Joe Fisher, Houston

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