Kinder Morgan Energy Partners LP said it has started construction on its $30 million Cheyenne Market Center (CMC) hub expansion project, which will include adding capacity to its Huntsman storage field in Cheyenne County, NB.

Plans also call for six new compressor stations that will increase firm transportation capacity on its pipeline system between the Cheyenne Hub in Wells County, CO, and the Huntsman field. FERC issued a certificate for the project last month (see Daily GPI, Sept. 11).

“The CMC service will provide shippers in the Rocky Mountain region with valuable storage options to help them better manage their natural gas volumes and address market opportunities,” said Rock Meyer, president of KMP’s West Region Gas Pipelines. “An additional 6 Bcf of natural gas storage will be available at Huntsman following completion of the project.”

FERC staff told the full Commission on Sept. 10 that the project will give shippers in the region new choices as to the type of service offering at the Cheyenne Hub, “particularly with regard to additional abilities to store gas and use receipt and delivery points on short notice. Second, the project will give customers gas supply management options required because of pricing volatility caused by varying weather conditions in the Rocky Mountain region. Finally, the Cheyenne market center will serve to enhance deliverability options in order to provide an additional outlet for Rocky Mountain gas in an otherwise constrained production area.”

Kinder Morgan said the project would be accretive to cash available for distribution to KMP unitholders upon completion next summer and fits well with its strategy of developing fee-based projects that are fully subscribed under long-term contracts.

To accommodate the additional volumes, Kinder Morgan will add more than 10,000 horsepower of compression at the existing Rockport and Huntsman facilities, and will construct a new station in Kimball County, NB, that will provide 2,300 horsepower of compression. In addition, 10 injection/withdrawal wells will be drilled at the Huntsman storage field. The additional infrastructure will have an associated injection capability of 38 MMcf/d and an associated withdrawal deliverability of more than 62 MMcf/d.

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