In a busy regular meeting last Wednesday, FERC awarded certificates to two Rocky Mountain gas pipeline projects and a pipeline to a proposed LNG terminal in the Bahamas (see related story). The Commission also asserted “exclusive jurisdiction” over the “siting, construction and operation” of an LNG project that Sound Energy Solutions (SES), a U.S. subsidiary of Japan’s Mitsubishi Corp., is planning to build in the Port of Long Beach, CA (see related story).

FERC granted certificates to Colorado Interstate Gas Co.’s 380-mile, 560,000 Dth/d Cheyenne Plains pipeline and to a 125,000 Dth/d expansion of TransColorado Gas Transmission. Both projects would provide much needed regional export capacity for the Rocky Mountains where abundant gas reserves are waiting to be developed and shipped to market once the pipelines are built. However, Commission staff said still more capacity is needed.

In a special report on the Rocky Mountain region, FERC staff said even with these two new projects there still will be insufficient capacity to meet the potential 8 Bcf/d of Rocky Mountain production in 2005.

According to the report, Wyoming had the largest increase in proved reserves, by state or federal region, from 2001 to 2002 at 2.1 Tcf (total U.S. reserves increased by 3.5 Tcf over that period). The region holds 26% of total U.S. gas reserves and has about 209 Tcf of total gas resources (proved, probable and possible reserves).

The 11 pipelines in the region currently have a capacity to export 5,239 MMcf/d. But EIA estimated that the Rockies could have produced 6 Bcf/d in 2003. And consultants at Pace Global Energy Services estimate that the region’s production could grow to 8 Bcf/d by 2005 and 11 Bcf/d by 2010 given adequate pipeline capacity.

Since mid-1999 FERC has approved 19 projects in the Rockies with about 4.5 Bcf/d of additional pipeline capacity. In total, 2,168 miles of new pipeline and almost 500,000 horsepower of additional compression have been added. Cheyenne Plains and TransColorado will add another 0.7 Bcf/d of capacity initially. Cheyenne Plains also has filed to expand its system to 730,000 Dth/d and theoretically could grow to 1.7 Bcf/d with added compression.

The $425 million Cheyenne Plains pipeline will be a significant new addition to the region, providing a new direct route to Midcontinent markets for rapidly growing Powder River Basin coalbed methane production, gas supply from the Jonah Field in the Green River Basin in western Wyoming and other production from the Piceance Basin in western Colorado.

The 36-inch diameter pipeline project will include several laterals, approximately 23,063 horsepower of new compression, a gas treatment plant at the Cheyenne Hub in Weld County, CO, and nine new pipeline interconnects. It will connect with Colorado Interstate Gas and Wyoming Interstate Co. at the Cheyenne Hub, and with Kinder Morgan Interstate Gas Transmission, 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. at various locations along the pipeline route to Kansas.

Greensburg, KS, was picked as a destination for the pipe because multiple pipelines meet there, providing more than 6 Bcf/d of takeaway capacity in the area. The project has been targeted for in-service in August 2005.

The TransColorado project will provide a southwestern market outlet for burgeoning Piceance Basin supply. The Kinder Morgan subsidiary signed a 10-year firm gas transportation contract with a major producer for the project, but also may plan a much larger 600,000 Dth/d expansion to accommodate additional production from the Piceance, Paradox, Uinta and other basins in Colorado, Utah and Wyoming (see NGI, Sept. 29, 2003, March 17, 2003).

The current TransColorado expansion project would provide additional firm capacity from northwestern Colorado to the Blanco Hub in New Mexico. It is expected to cost $50 million. To accommodate the additional volumes, the company will construct three new compressor stations and modify equipment at two existing locations, which will increase compression by more than 20,000 horsepower.

FERC staff told the Commission Wednesday that it is aware of 11 other regional pipeline projects in various planning stages with a total of 4.8 Bcf/d of proposed capacity to move Rockies gas. EnCana’s proposed 1.3 Bcf/d Entrega pipeline, which would bring Piceance Basin supply to the Cheyenne Hub, is the largest planned project currently.

“With the inclusion of all the pre-filing (0.1 Bcf/d) and on the horizon (4.8 Bcf/d) projects, the pipeline capacity (10.8 Bcf/d) is close to meeting the potential 11 Bcf/d production rate in 2010,” FERC staff said in its report.

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