FERC yesterday conditionally approved Transwestern Pipeline’sproposal to build a new Gallup compressor station on the San Juanlateral near its mainline and to install cooling equipment at twoexisting compressor stations also on the lateral.

The Gallup station would be built near the terminus of the SanJuan lateral near Thoreau, NM, and the cooling equipment would beconstructed at the existing LaPlata “A” and Bloomfield compressorstations.

Transwestern said the $11.6 million Gallup expansion will allowit to maintain its mainline operating pressure from Thoreau west toCalifornia at 950 psig at all times, enabling it to betteraccommodate shifts in market demand to the east without restrictingdelivery capacity to California. In short, the pipeline will beable to once again operate its mainline west of Thoreau at itscertificated capacity of 1.09 Bcf/d on a firm basis (delivering750,000 Mcf/d to Needles, CA, and 340,000 Mcf/d to Topock, AZ), aswell as meet its demand for gas on the eastern portion of itssystem.

The cooling equipment will cause the lateral and associateddown-field compression to operate more efficiently, creating anadditional 50,000 Mcf/d of incremental firm capacity on theBlanco-to-Thoreau segment of the San Juan lateral, according toTranswestern.

The pipeline noted it has contracted with six shippers for theentire 140,000 Mcf/d of capacity that will be created by the Gallupexpansion. They include Southern Energy Inc., Sempra EnergyTrading, North Star Steel Co., Duke Energy Trading and MarketingLLC, Reliant Energy Services Inc. and El Paso Energy Marketing Co.With the exception of North Star Steel and El Paso Energy, all ofthe transportation contracts are for five years.

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