Powder Growth Prompts Medicine Bow Expansion

Pipeline companies are having a hard time keeping up with the rapidly growing coal-bed methane production in the Powder River Basin. Coastal Corp.'s Wyoming Interstate Company just put its Medicine Bow lateral into service last November and the company already is filing plans for a second expansion, which will add another 675,000 Dth/d of firm capacity, bringing the total to more than 1 Bcf/d.

"WIC has moved quickly on our proposed loop of the Medicine Bow Lateral to satisfy the requests of producers who have met with significant success in developing the Powder River Basin," said Colorado Interstate CEO Jon R. Whitney. CIG operates Wyoming Interstate. "Our proposed loop will enable this prolific basin to continue to help meet the growing national demand for natural gas."

WIC's application calls for initially increasing capacity by 675,000 Dth/d to 1,055,000 Dth/d with the potential to double that with added compression. WIC's existing 155-mile Medicine Bow Lateral is a 24-inch diameter line that extends from the southern end of the basin near Douglas, WY, to WIC's mainline southwest of Cheyenne. The proposed loop would parallel the existing line with a new 36-inch diameter line and add 7,170 hp of compression at an estimated cost of $160 million. Producers have committed to 556,000 Dth/d of the proposed capacity. WIC plans to have the expansion in service in December 2001.

The Powder River Basin is the most active coal-bed methane play in the United States. According to a report released by the Wyoming State Geological Survey, the most recent data indicate there is 25 Tcf of recoverable gas in the basin. "This eclipses previous estimates of recoverable gas that ranged from 9 to 12 Tcf," the survey said. The Wyoming Oil and Gas Conservation Commission predicts as many as 5,000 new wells will be drilled in the basin this year.

Since 1998, WIC has spent $108 million to increase gas transportation capacity out of the basin. On Aug. 1, WIC placed into service additional compression that expanded capacity on the Medicine Bow Lateral to 380,000 Dth/d from 260,000 Dth/d.

"We put the first line in and they almost immediately filled it up," said Craig Coombs, director of project development for CIG. "They had to pause in their drilling because they hit the capacity of the line. Once we expanded it, drilling started again... It's over 300,000 Dth/d today, but we are anticipating by next summer it's going to be full. We may have a capacity [constraint at Cheyenne]. We could have a situation next summer and next fall before we get the loop in where the existing lateral is full and there's no place to take the gas."

Coombs said there is sufficient takeaway capacity currently at the Cheyenne Hub on Trailblazer, WIC, CIG, Front Range and Williams, but that probably will not be the case relatively soon. "In the winter you have space heating load in Denver, which absorbs some of that volume, but I think next summer it could get very constrained, and the year after that it could be very tough."

CIG and Williams are proposing separate greenfield pipeline projects that would begin at Cheyenne and terminate in southwestern Kansas on the Midcontinent pipeline grid, but those projects are three years from being in service.

"We have to get this going and get the [COCO project] line in soon. We should have been building this now but we're not going to go out and spend a bunch of money without contracts so that's why we're in this situation."

CIG is holding an open season through Oct. 6 on the COCO Pipeline, a 400-mile pipeline extending from the Cheyenne Hub through CIG's market area storage fields to the interconnection of several Midcontinent pipelines near Greensburg, KS, including ANR, Panhandle, Northern Natural, NGPL, and Williams. CIG currently anticipates at least 500 MDth/d of transport capacity for this line with an in-service date in late 2003. The project is similar to Williams' Western Frontier Pipeline, which would extend to Hugoton Station on Williams' Central pipeline system in southwest Kansas. Trailblazer also is planning an expansion of its existing 436-mile pipeline system, which runs from Colorado through southeastern Wyoming to Beatrice, NB.

Rocco Canonica

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