With Rockies basis soaring into the $2.80s in September, Colorado Interstate Gas has picked a good time to relaunch its proposed 400-mile Cheyenne Plains pipeline project (formerly called Coastal Connection), which would provide greater takeaway capacity for growing Rocky Mountain gas production. The pipeline would extend from the Cheyenne Hub in northern Colorado to Midcontinent pipeline markets near Greensburg, KS.

An open season will close Oct. 18 on the project, which could end up being a 24-inch diameter pipeline with 350,000 Dth/d of capacity or a 30-inch diameter pipeline with 540,000 Dth/d of firm capacity depending on the market response. CIG anticipates filing a FERC application by April 30, 2003 and achieving an in-service date in mid 2005.

Cheyenne Plains would provide 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 and other gas production from Wyoming. Greensburg, KS, was picked as a destination because several pipelines meet there, including ANR, Panhandle, Northern Natural, NGPL and Williams, which together provide more than 6 Bcf/day of takeaway capacity in the area.

CIG already has had two open seasons on the Cheyenne Plains project. The last one was in July 2001. Williams followed in CIG’s footsteps with a project of its own called Western Frontier, which eventually was shelved because of the company’s credit and financial crisis (see Daily GPI, Aug. 5 ). Both Western Frontier and Cheyenne Plains were designed to bring gas from the Cheyenne Hub to pipeline interconnections in the Midcontinent region.

More recently, Kinder Morgan has come out with a similar project of its own. Its 411-mile Advantage pipeline, which would utilize portion’s of Kinder Morgan’s existing system and Pony Express line, would provide Rockies producers access to markets as far away as Kansas City (see Daily GPI, Aug. 8).

CIG’s Craig Coombs recently told NGI that the time is now for a new greenfield pipeline out of the Rockies to eastern markets. “We are actively pushing Cheyenne Plains,” Coombs in an interview last month (see Daily GPI, Aug. 14). “We have an anchor tenant for 175,000 Dth/d under a long-term contract. We’re anticipating getting 540,000 Dth/d to make this work at the rates we proposed. It’s a grass roots pipeline from Cheyenne to Greensburg, KS. Our goal is to try to get this project contracted before the end of the year, and then file in April 2003 with an in-service date of July 2005, about a year later than originally expected.”

According to Coombs the biggest factor delaying construction of a much needed eastbound pipeline out of the Rockies has been the unwillingness of producers to step up and become large capacity holders. “I think the difference between today and a year ago is that the basis is just much more exaggerated; it’s much bigger and it’s not going to get any better, we don’t think, in the long run,” he said.

Opal, WY, basis on Sept. 23 reached $2.88, the highest level this year and possibly an all-time high. Average daily spot basis (the difference between daily spot prices at Opal, WY, and the Henry Hub in Erath, LA) at Opal was 60 cents last year, 50 cents in 2001 and 24 cents in 1999. Rising production, weak western demand and inadequate pipeline capacity out of the Rocky Mountain region have been blamed for depressed Rockies prices and the large increase in the basis spread (see Daily GPI, June 26).

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