After pulling the plug in two previous attempts, the third time proved a charm for Colorado Interstate Gas (CIG), which last week said it will build a new natural gas pipeline to serve the Rocky Mountain region after receiving long-term contracts for the full capacity of the 400-mile-long project. Service is scheduled to begin by mid-2005.

The proposed Cheyenne Plains Pipeline will serve Midwest markets, extending from the Cheyenne Hub in northern Colorado to numerous pipe connections near Greensburg, KS. The project, formerly called Coastal Connection, held an open season beginning in September, offering 540,000 Dth/d of firm capacity. The 30-inch pipe will be able to deliver 540 MMcf/d. CIG, an El Paso Corp. subsidiary, expects to file an application for a certificate with the Federal Energy Regulatory Commission by next spring. No financial details were released.

The Rocky Mountain region’s lack of takeaway capacity has become a sore point for gas producers but in recent months, more pipe operators have indicated a willingness to expand their systems. CIG’s new pipe would offer a more direct route to the Midcontinent for the expanding Powder River Basin coalbed methane production, natural gas fields from the Jonah Field in the Green River Basin, and other production in Wyoming. Two previous open season attempts were scuttled by CIG; the last one was in July 2001. Other operators also have failed to obtain enough firm capacity to build more pipe, but that situation has been evolving for several months.

Kinder Morgan has a similar project of its own, a 411-mile Advantage pipeline from the same basins into the Midcontinent, including an expansion of its Pony Express line, which would give Rocky Mountain producers access to markets to Kansas City (see NGI, Aug. 12). Kern River Gas Transmission has an expansion scheduled to begin service in May 2003 that will increase capacity to 1.8 Bcf/d from 900 MMcf/d from the Rockies, but most of the gas will be transported to California (see NGI, July 22).

Denver-based consultant Bentek Energy LLC released an in depth analysis in late October of the problems in the Rocky Mountain region’s basis differential. The report found that the large negative basis differential would continue over the long term even with pipeline capacity increases because with more capacity, Rocky Mountain producers will increase drilling, and thus, increase supply (see NGI, Nov. 4).

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