El Paso said it is finally nearing completion of the All American oil pipeline conversion and its integration into the southern pipeline system. All American was bought by El Paso from Plains All American Pipeline LP in February 2000 (see Daily GPI, Feb. 4, 2000 ). The pipe segment extends 1,088 miles from McCamey, TX, to Emidio, CA, and will boost system flexibility by adding 230 MMcf/d of capacity this year on the southern system from the Permian Basin in West Texas to markets in Arizona and California.
El Paso’s Line 2000, which is the first phase of the conversion, will add the 230 MMcf/d solely for flexibility and balancing purposes. El Paso initially planned to decommission a portion of its existing pipeline system and replace it with the All American capacity, but shippers and FERC eventually forced the company to cancel that plan and make the project an addition to its existing system. Line 2000 will go into service in phases this summer and fall.
El Paso also could add another 320 MMcf/d of capacity on the line with additional compression, but the company has not yet held an open season for the additional space. It recently said it could take up to two years to have the additional capacity available given the current lack of interest in transportation space to the California market.
“We are just going to use this 230 MMcf/d of new capacity for now,” said spokeswoman Kim Wallace. “The other power-up compression project would add 320 MMcf/d in a traditional expansion project with customers. That’s out there as one of many possibilities to help address the issues with our Full-Requirements shippers. It’s not anything that has been approved yet.”
Another potential addition to the El Paso system from the All American line conversion is its proposed Daggett-to-Ehrenberg lateral, a bidirectional piece of pipeline within California (see Daily GPI, Feb. 11 ). El Paso held a second open season on the 700 MMcf/d lateral in February but still is negotiating with potential customers. The proposed 1903 lateral would extend between Ehrenberg, AZ, Daggett, CA, and Emidio, CA. El Paso expects the lateral facilities could be in service by the fourth quarter of 2003.
The company held an open season last July on the proposal but rejected all of the bids that were received because of insufficient volumes and term commitments (see Daily GPI, July 18 ). No firm bids were received on transportation service from receipt points located near Ehrenberg to delivery points located near Daggett.
“It’s a potential project,” said Wallace. “We’re working with customers right now to try to get contracts for it. That capacity probably would serve the east-of-California customers. They seem to be the ones right now that have an immediate need.”
As part of the project, El Paso is proposing interconnects in the Ehrenberg area with its existing system (an interconnect to be called El Paso Colorado River) and the North Baja Pipeline, as well as other proposed interconnects. A connection with Southern California Gas (SoCalGas) near Ehrenberg is not being proposed because the existing interconnection is already fully subscribed. Other interconnects are proposed in the Daggett area with Kern River, Mojave, SoCalGas, and Pacific Gas and Electric. In the Emidio area, connections are proposed with Kern River, Mojave, OXY USA, SoCalGas and PG&E.
With the extension of its southern system into California through the completion of this bi-directional lateral, El Paso will be able to both receive and/or deliver gas within the state or at the California border. As a result, it expects to file a tariff proposal with FERC with service conditions for receipt of gas within the state or at the border for further delivery to points on the existing El Paso system.
Wallace said Colorado Interstate Gas’ 850-mile Ruby Pipeline project from the Opal Hub in Wyoming to Sacramento, CA, is still on the drawing board. “They are continuing to work with customers on that too. I believe they have signed up a couple of customers but we need to get more market interest before we will apply with FERC and say this is what we want to do. It’s just another option out there to try to bring more gas to California from the Rockies.”
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