Kicking off the new year with a binge of open seasons, Kinder Morgan Inc. (KMI) and Kinder Morgan Energy Partners, LP (KMP) launched three separate offerings last week for pipeline projects poised to bring new supplies of gas into Arizona markets and the Midwest.

KMP announced a binding open season for additional firm natural gas transportation capacity on its Trailblazer Pipeline system, which originates in Weld County, CO and terminates in Gage County, NE. The limited partnership also proposed a 455-mile Silver Canyon Pipeline project would originate from the Window Rock area in Apache County, AZ and move natural gas westward to various points in the Phoenix market, terminating at the California border near Ehrenberg, AZ.

Not to be outdone, KMI announced an open season seeking shipper interest in a proposal to expand capacity on its TransColorado natural gas pipeline and extend the system to link Rocky Mountain gas supplies to growing markets in the southwestern United States.

The Kinder announcements came on the same day that Pacific Texas Pipeline Corp. updated the progress on its proposed $1 billion, 800-mile Picacho Pipeline system, which would extend from the Permian Basin in Texas to rapidly growing power generation, industrial and local utility markets in Arizona.

The current Silver Canyon proposal calls for the pipeline to have a capacity of 750,000 Dth/d and feature delivery points at key locations in the Phoenix area, as well as interconnections with Southern California Gas Co. at Ehrenberg and the North Baja Pipeline system. In addition, KMP said Silver Canyon would offer connections to proposed third-party pipelines and storage facilities in Arizona.

“This project would serve one of the fastest growing regions in the country, which has a need for additional pipeline infrastructure to meet the rising demand for natural gas,” said Deb Macdonald, president of Kinder Morgan’s gas pipeline group. “In addition to much-needed capacity, the Silver Canyon Pipeline would offer new and flexible services at competitive rates to meet the ongoing needs of shippers.” The pipeline is anticipated to be in service in mid-2006.

To facilitate access to supplies of natural gas, KMP said Silver Canyon would interconnect with the terminus of a proposed extension of KMI’s TransColorado system.

Under KMI’s open season, the company is looking for support for the 100-mile extension of TransColorado from the Blanco Hub area in San Juan County, NM, to Window Rock, as well as a mainline expansion. These projects would provide an incremental outlet of 750,000 Dth/d of natural gas from the San Juan and Rocky Mountain basins.

KMI said the expansion would include additional compression and line-looping infrastructure to increase capacity on the existing TransColorado mainline by as much as 150,000 Dth/d. The mainline system, which currently has long-haul capacity of approximately 300,000 Dth/d, extends about 300 miles from the Greasewood Hub in Rio Blanco County, CO, to the Blanco Hub area, interconnecting with several major interstate systems along the way.

“Along with making additional capacity available, we are also considering installing new supply facilities that would provide shippers with improved access to growing natural gas production in new and developing areas, including the Piceance and Paradox basins,” Macdonald added.

Under the Trailblazer solicitation, three different expansion capacity sizes are being offered, which give shippers an opportunity to bid on capacity of 50,000 Dth/d, 75,000 Dth/d or 100,000 Dth/d. KMP said once interest is analyzed, it will inform bidders in February which size project will be pursued and how capacity will be allocated.

“The proposed expansion will provide Rocky Mountain natural gas producers with improved access to markets in the Midwest as early as the summer of 2004,” said Scott Parker, vice president, Business Development. “We believe there is still a strong need for additional expansion, as evidenced by our expansion project completed last year, which increased Trailblazer capacity by 60% to 846,000 Dth/d, all of which was sold under long-term contracts.”

To deal with expanded volumes, KMP said Trailblazer would construct 36-inch pipeline loops at various locations along the existing right-of-way and re-rate the horsepower of existing compressor units. The company added that it hopes to make the additional capacity available to shippers during the summer of 2004.

The 436-mile Trailblazer system interconnects with several major interstate lines, including the Colorado Interstate Gas Co., Wyoming Interstate Company, Public Service Company of Colorado, Kinder Morgan Interstate Gas Transmission, Northern Natural Gas and Natural Gas Pipeline Company of America (NGPL), a subsidiary of KMI.

The binding open seasons on the Silver Canyon Pipeline and the Trailblazer expansion close on March 31 at 5 p.m. CST and Feb. 11 at 3 p.m. CST, respectively, while the TransColorado open season concludes March 14 at 5 p.m. MST.

For additional information about the TranColorado expansion project, contact Julian Huzyk, general manager, TransColorado at (303) 763-3230. Shippers interested in the proposed Silver Canyon Pipeline project can call Steven M. Harris, vice president Business Development-West, for more information at (713) 369-9214. To obtain more information on the Trailblazer expansion, contact Frank Strong, director, Business Development, at (630) 691-3790.

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