As part of a proposed expansion, El Paso Natural Gas Co. (EPNG) is conducting a dual binding open season to solicit shipper commitments for firm transportation capacity from the El Paso Permian Basin system’s Keystone Pool to a new power plant that Southwestern Public Service Co. is constructing at its Hobbs, NM, power complex.
The open season process will include a capacity open season for existing capacity that may be included in the project and an expansion open season for capacity to be added. If no shipper is awarded the existing capacity, the existing capacity will be reserved for, and used in, the expansion project. If the capacity is reserved, it would be available in the interim prior to its use in the expansion project. Both open seasons will began Aug. 31. The capacity open season will close at 5 p.m. Mountain time on Sept. 7. The expansion open season will close at 5 p.m. Mountain time Sept. 17.
The existing capacity available under the capacity open season is comprised of 100,000 Dth/d for the period Oct. 1 through March 31, and 150,000 Dth/d for the period April 1 through Sept. 30 for 15 years, starting within one year. The primary point of receipt is the Keystone Pool and the primary delivery point is Monument. The capacity is being offered at the maximum applicable firm rate. Successful bidders will be required to execute a pro forma firm transportation contract for the awarded capacity within five business days of its being tendered. El Paso expects to complete the project by Dec. 1, 2008.
The combination of existing facilities and new pipe and compression will provide firm transportation from the Keystone Pool to a new delivery point to be constructed at the MarkWest Header station in Lea County, NM, near the Linam Ranch plant. In addition to the existing capacity, the project specifically entails:
In a separate project, EPNG intends to relocate and replace the Eunice Compression Station because of environmental and other issues.
Because the project mainly involves the construction of a separate delivery lateral, El Paso said it is unlikely that reacquiring any existing firm capacity currently under contract would allow it to avoid constructing any new facilities. During the expansion open season, however, any existing shipper may submit a binding offer to turn back firm capacity in the area of the project to be effective when the new facilities go into service, which El Paso will consider.
For more information, contact Tom Dobson at (719) 520-4606, Craig Coombs at (719) 520-4387, or Sean Kolassa at (719) 520-4892.
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