FERC last week gave Cheyenne Plains Gas Pipeline Co., a subsidiary of El Paso Corp., the go-ahead to begin deliveries on its 380-mile mainline pipeline of natural gas from the prolific Rocky Mountain region to markets in the Midcontinent and the Midwest.
Specifically, Commission staff authorized the start of operations on the 36-inch diameter mainline in Colorado and Kansas, on three small diameter interconnecting pipelines in Kiowa County, KS (Cossell Lake Lateral, South Rattlesnake Creek Lateral and Sand Dune Lateral) and at nine receipt and/or delivery meter stations on the system. But it has not yet approved service at the Cheyenne Compressor Station and treatment facilities in Colorado.
El Paso spokeswoman Kim Wallace said the first commercial operation of the pipeline was last Wednesday, with gas flowing at 48.5 MMcf/d and at 30 MMcf/d on Thursday. She noted that without compression the pipeline could deliver up to 390 MMcf/d. Wallace was unable to say when FERC would approve operation of the compression facilities.
She said Cheyenne Plains expects the pipeline to reach its full capacity of 560 MMcf/d by Jan. 1. The pipeline plans to add 170 MMcf/d of capacity by December 2005 or early 2006, bringing the total capacity on the Cheyenne Plains system to 730 MMcf/d when completed. FERC approved the expansion in September.
The completion of the pipeline has been long awaited by Wyoming producers, who say that it will provide much needed takeaway capacity for their production and will bring prices for their gas more in line with Henry Hub cash and futures prices.
The Cheyenne Plains pipeline extends from interconnects with Colorado Interstate Gas and Wyoming Interstate Co. at the Cheyenne Hub in Weld County, CO, to interconnections with six interstate pipelines and one intrastate pipeline in southwestern Kansas, including Kinder Morgan Interstate Pipeline, Natural Gas Pipeline Company of America, Southern Star Central Gas Pipeline, ANR Pipeline, Northern Natural Gas, Panhandle Eastern Pipe Line and Kansas Gas Service Co.
The Cheyenne Plains pipeline is fully contracted on an annual basis, according to the company. Cheyenne Plains also has entered into a binding precedent agreement with EnCana Marketing (USA) Inc. for the entire 170 MMcf/d of expansion capacity under a 10-year term at a negotiated rate.
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