Coastal’s Wyoming Interstate Co.’s Medicine Bow Lateral is online and flowing gas out of the Powder River Basin. While the pipeis not full, industry players with their eyes on the Powder RiverBasin expect producers will be ramping up production to takeadvantage of the additional capacity.

“It’s terrific for the producer. It gives them another option toget out of the basin. There’s more transport capacity in theshort-term than there is productive capacity, but we see thatproductive capacity ramping up in short order,” said John Harpole,president of Mercator Energy in Denver. “Some of the firm shipperson Medicine Bow may not have covered their demand charges, but Ibelieve that that’s a short-term phenomenon.”

Stu Wagner, a principal with Petrie Parkman & Co. said hebelieves a “fairly modest” amount of gas was waiting for MedicineBow. “[Producers] knew this wasn’t coming on until late in the yearso they timed their drilling to correspond with the opening of thispipeline. There was some build-up [of gas] in the last few months.”Wagner said he expects to see “a pretty good ramp-up” of productionover the next 30 to 90 days, but still not enough gas to fill upthe pipe. Operational and regulatory issues are what are holdingproducers back, at least for a little while, “…but I think thebuild-up will be fairly rapid. I’m not saying you’re going to getto full capacity by April.”

Wagner said the future looks bright for Powder River productionand the market for it. “While there are some regulatory issuesbeing sorted out, this has the potential to be one of the biggestplays in the country. [Medicine Bow is] more likely to beremembered as the first rather than the last [pipeline project inthe region].”

“We received excellent customer response to this project fromthe very beginning, and we now are ready to move more of theirPowder River Basin gas to market,” said Jon Whitney, CEO ofColorado Interstate Gas (CIG), which operates Wyoming Interstate(WIC).

Construction on the Medicine Bow Lateral began in August.Medicine Bow is a 150-mile, 24-inch diameter pipeline with 7,170horsepower of compression at the newly constructed DouglasCompressor Station. It will receive Powder River Basin coalbedmethane gas from Ft. Union Gas Gathering LLC and Thunder Creek GasServices LLC at the Douglas Compressor Station and transport it toWyoming Interstate’s mainline west of Cheyenne, WY.

Initial capacity of the line is 260 MDth/d or 273 MMcf/d.Wyoming Interstate filed an application for approval to expandcapacity to 380 MDth/d (400 MMcf/d) by the fourth quarter of 2000.WIC also is laying the groundwork for a third expansion to furthermeet its contractual commitments with producers tapping into theprolific coal-bed methane (CBM) reserves in the Powder River Basin(see NGI Sept. 20).

The CBM producers “have signed on for increasing contractamounts over a period of four years,” said CIG spokesman RobertStovall. The $12 million expansion, for which Wyoming interstatefiled in September, would add 7,170 hp of compression and 5.6 milesof 24-inch pipeline and have a targeted in-service date of Oct. 1.

Joe Fisher, Houston

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