A major new pipeline project to serve the California market has fallen by the wayside, the victim of lower demand, according to sponsors Kinder Morgan Energy Partners LP (KMP) and Calpine Corp. The two companies said they were dropping their $1.7 billion, 1,030 mile proposed pipeline that would have run from the San Juan Basin in New Mexico to Needles and Topock near the California border.

The companies completed a successful open season in the middle of last year (see Daily GPI, June 8, 2001 ), but since then “a lot things have happened, for instance Sept. 11 and the economic downturn,” plus it’s a different situation in California, a Kinder Morgan spokesman said. “We said we wouldn’t go ahead with it if we couldn’t get firm commitments, and a lot of things have happened that make it difficult for people to commit.”

Sonoran, first proposed in May of 2001, was one of several new pipelines and expansions aimed at serving what was then a skyrocketing California market. It was first proposed last spring, one of several new pipelines and multiple expansions proposed to serve the wild demand growth in California. In announcing cancellation of the project, the partners advised they had not spent significant dollars on its development. Both KMP and Calpine will continue to evaluate other opportunities to serve the growing California market.

©Copyright 2002 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.