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Trailblazer Could Lose Customers with Gas Quality Spec Changes

Wyoming Gov. Matt Mead and the Wyoming Pipeline Authority (WPA) have called on FERC to reject Trailblazer Pipeline Co. LLC’s proposed revisions to its natural gas quality standards, saying they would be not only harmful to the state but the rest of the nation as well.

"Wyoming is the third-largest natural gas producing state,” wrote the governor. “Over 90% of the gas produced in Wyoming is exported to the rest of the country. The ability to provide this resource efficiently and economically to the rest of the country depends on interstate natural gas pipeline capacity under reasonable terms and conditions.

"I urge the Commission to reject Trailblazer's proposed limitations on total inert gases and on cricondentherm hydrocarbon dewpoint [CHDP]," Mead wrote in a letter last Friday to outgoing Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff [RP13-1031]. The CHDP is the temperature at which any hydrocarbon-rich gas mixture, such as natural gas, will start to condense out of the gaseous phase. An inert is a gas that does not undergo chemical reactions under a set of given conditions.

The Commission addresses these and other gas quality specifications on a pipeline-by-pipeline basis.

The Wyoming Pipeline Authority (WPA), which was established to promote and defend the country's access to natural gas produced in Wyoming, warned that Trailblazer's proposed revisions to its gas quality specifications could result in more of the Powder River Basin gas flowing out of the Rockies on pipelines other than Trailblazer.

The WPA contends that, contrary to Trailblazer's claim, the pipeline's proposed 4% total inerts standard carries significant economic burdens, and risks significant reduction in gas volumes flowing on the Trailblazer system.

Historically, Powder River Basin gas, which is generally high in total inerts, has flowed predominantly down Wyoming Interstate Co.'s Medicine Bow Lateral to the Cheyenne Hub and into Trailblazer. "However, imposition of a 4% limit on total inerts along a pathway for Powder River Basin gas will likely result in Powder River Basin gas flowing out of the Rockies via pipelines other than Trailblazer on which the inert specification is not an issue," the WPA told FERC.

A likely alternative disposition for gas rejected by Trailblazer would be into Cheyenne Plains Pipeline Co., which has no limit on total inerts and can deliver gas to Northern Natural Gas and Natural Gas Pipeline Company of America, the WPA said. However, redirecting the Powder River gas to Cheyenne Plains will come at a cost. Cheyenne Plains' transportation rate ($0.3525/MMBtu) is higher than Trailblazer's rate for firm service ($0.0948/MMBtu).

In asking FERC to reject Trailblazer's request to the proposed revised gas quality specification, the WPA said the pipeline "has not satisfied the threshold criteria applied by the Commission for approving revisions to pipeline gas quality specifications. Thus, Trailblazer has failed to demonstrate either that there is a need to adopt a total inerts standard in order to address a current operational problem on the system, or that the proposal is justified to avoid creating operational problems in the future."

Trailblazer Pipeline, which is owned by Tallgrass Development LP, operates the 436-mile Trailblazer Pipeline, which winds through parts of Wyoming, Colorado and Nebraska. It provides an outlet for Rocky Mountain gas seeking Midwest and East Coast markets.

ISSN © 2577-9877 | ISSN © 1532-1231
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