El Paso Natural Gas said it plans to test the market again for a proposed 700 MMcf/d bi-directional lateral between Ehrenberg, AZ, Daggett, CA, and Emidio, CA. An open season for the lateral, which will use portions of the All American Pipeline El Paso purchased last year, will close on Feb. 28. El Paso expects the lateral facilities could be in service by the fourth quarter of 2003.

The company held an open season last July 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. El Paso was offering a reservation rate of no greater than 10 cents/Mcf on a 100% load factor basis and was estimating a fuel charge for both paths of 1.5%.

The company now is proposing a new portion of the line to Emidio and appears to have raised the maximum transportation charge to 15 cents plus fuel. The lateral will extend in a northwesterly direction from the Arizona-California border near Ehrenberg to a point located near Daggett (Line 1903) and then in a westerly direction to its terminus near Emidio, which is located south of Bakersfield (Line 1904). The line would be capable of moving up to 700 MMcf/d of gas between proposed interconnects.

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.

Sponsors of the Desert Crossing Gas Storage and Transportation System said the El Paso plan will help their proposed new pipeline project. “This is great news for potential Desert Crossing shippers,” said Greg Lander, acting manager of Desert Crossing. “The El Paso initiative further enhances the ability to get gas from Desert Crossing into the Phoenix, southern Arizona and New Mexico markets, which will significantly improve flexibility and optionality for our shippers.

“While many power plant sites are considering direct connections with Desert Crossing based on preliminary discussion to date, the El Paso initiative allows plants that are further away to justify utilizing Desert Crossing without the need to directly connect. The positive impact for shippers preparing Desert Crossing Storage and Transportation submittals will improve overall economic and operational flexibility. The timing couldn’t have been better for everyone concerned.”

Desert Crossing’s open season (see www.desert-crossing.com) began Jan. 10 and continued through Friday, Feb. 8. The project includes an 800,000 Dth/d pipeline system backed with a 10 Bcf high-deliverability salt cavern complex planned to have 800,000 Dth/d of withdrawal capacity. The Desert Crossing pipeline will run from north-to-south beginning at an interconnect with Kern River outside of Las Vegas and terminating at the southern mainline of El Paso near its Wenden Compressor Station west of Phoenix.

In addition the system anticipates operating as a “super-header” with interconnections between Desert Crossing and all of the other east-to-west lines that are contemplated or currently operating in the area: Transwestern, Southern Trails, Sonoran, El Paso Northern Mainline, SoCal Gas, PG&E and Southwest Gas. Desert Crossing is sponsored by Allegheny Energy Supply Co., Salt River Project (SRP) and Sempra Energy Resources.

For additional information on the El Paso project, call Bill Bolch at (719) 520-3780.

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