Illustrating the tremendous demand growth that has nearlycrippled California’s energy market, Kern River Gas Transmissionannounced a plan yesterday to more than double the amount of gas ittransports to the state from Rocky Mountain region supply basins.

“We knew the demand was strong, however the response was evengreater than we anticipated,” said Kirk Morgan, director ofbusiness development for Kern. “There is a tremendous demand fornatural gas to fuel new electric generation facilities inCalifornia and Nevada. This expansion provides shippers with aneconomically attractive opportunity to secure additional firmyear-round transportation.”

Last November, Kern River held an open season to determineinterest in providing additional capacity on its system. Thepipeline said yesterday it plans to file with FERC in June for a $1billion pipeline expansion that will include looping 700 miles ofits 926-mile pipeline system to California from Wyoming, adding 900MMcf/d of firm transportation capacity.

The 2003 Kern River Expansion Project is just one of threeprojects the company has under way. Last November it filed itsfirst expansion proposal ever with FERC, an $80 million project toadd 124 MMcf/d of firm capacity by May 2002. The 2002 CaliforniaExpansion Project relies largely on existing facilities with someadditional compression. Last week, the company announced anemergency expansion plan designed to provide immediate help to theCalifornia generation markets this summer. That project wouldincrease the 700 MMcf/d of firm capacity on the system by 19%, butsome of the new space would be incorporated into the other twoproposed expansions.

“Shippers are seeking more access to natural gas from RockyMountain basin, where producers are aggressively stepping upproduction,” said Morgan. “Kern River is in the right place at theright time to help bring that production to market.”

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