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Draft Study Finds Pipe Infrastructure Benefits Wyoming, Producers
A draft report on the pipeline infrastructure requirements for optimizing the flow of Rocky Mountain natural gas indicates that with strategic planning and significant pipe development, the region could reach its gas production potential of about 7.5 Bcf/d by 2005 and 10.9 Bcf/d by 2010.
However, the infrastructure has to keep up with development, said Pace Global Energy Services LLC, a global energy consulting and management services company, which plans to finalize the report this quarter. Last month, Pace’s preliminary findings were presented to the Wyoming Energy Commission.
What Pace found is that the Rockies has a resource base comparable to the Western Canadian Sedimentary Basin and is larger and less developed than Texas and the Gulf Coast. However, compared to these regions, the Rocky Mountain region has far less pipe capacity to move gas to markets.
“With 5.2 Bcf/d of pipeline capacity to move gas to market from Opal and Cheyenne, the pipes are full and an estimated 400 to 600 MMcf/d of gas is shut-in. Wyoming producers often overlook Colorado and Utah gas production in their strategic planning even though much of this gas competes for interstate capacity at Opal and Cheyenne,” according to the study. Consequently, the state of Wyoming and producers “are losing millions of dollars in revenues, royalties and taxes.”
In a “pipeline portfolio conceptual plan” presented by Pace, a “diverse portfolio of large-scale, economically expandable pipelines originating from the Opal and Cheyenne Hubs is critical.” The authors said, “these projects, staggered over the course of the next decade, will benefit the state of Wyoming, energy companies and suppliers by narrowing the basis differentials at supply hubs.
“Benefits of new, large-scale pipelines are greater than new pipeline capacity costs,” the draft noted. And the projected increased value for the state and energy companies could be $1 billion a year.
To learn more about the study, visit the web site at www.paceglobal.com.
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