Following a successful open season, Williams’ Northwest Pipeline on Thursday said it is proposing to construct its new 33-mile Colorado Hub Connection Project (CHC), which would provide transportation service from the Greasewood and Meeker hubs located in Rio Blanco County, CO, to a location near Sand Springs, CO, which has various pipeline interconnects and Northwest’s existing system to access western markets.

The company said it is also currently holding a reverse open season (ROS) to determine whether current holders of existing capacity on Northwest’s mainline system have an interest in relinquishing capacity that could be used in connection with the proposed CHC project, which has a proposed in-service date of Nov. 1, 2010.

The CHC project will provide a direct outlet for Piceance Basin gas supplies to access markets served by Northwest. In addition, as part of the CHC project, Northwest has proposed the use of its existing available mainline capacity to provide a combined lateral and mainline firm service from either the Greasewood or Meeker hubs to Northwest’s mainline delivery points near Ignacio, CO, where Northwest interconnects with El Paso Natural Gas Co. and Transwestern Pipeline Co. LLC.

The open season, which was held in April and May, resulted in expressions of interest totaling more than 600,000 Dth/d of mainline capacity for contract terms up to 15 years (see Daily GPI, April 30). The company’s ROS is seeking relinquishments of south flow capacity in the corridor extending from Stanfield, OR, to Ignacio, CO.

In contemplation of this ROS, Northwest said it has already entered into an agreement with an existing shipper that is offering to relinquish certain Stanfield to Ignacio capacity that may be used in the CHC project. This offer and any other offers of relinquishment received in response to this ROS will be evaluated on a nondiscriminatory basis.

As currently contemplated, the CHC project will allow Northwest to build new lateral facilities connecting its mainline system with gas supplies being developed in the Piceance Basin. The costs of the new facilities are anticipated to be offset by Northwest’s ability to collect maximum rates under long-term contracts for certain south flow capacity available on the southern portion of Northwest’s mainline system, known as the south end capacity, which Northwest has historically only been able to market on a short-term basis or at discounted rates.

“Through the sale of Northwest’s available south-end capacity, Northwest believes that the basic economics of the proposed CHC project can be justified,” the company said. “Thus, potential sales to interested CHC shippers of Northwest’s south-end capacity will be satisfied first before recontracting the capacity commitments that other shippers might offer for use in the CHC project via capacity relinquishment.”

For more information on the ROS, shippers can contact Hank Henrie at (801) 584-6625.

The Northwest Pipeline, which began as a 1,500-mile pipeline, is now a 4,000-mile bidirectional transmission system crossing the states of Washington, Oregon, Idaho, Wyoming, Utah and Colorado. Northwest’s system provides access to British Columbia, Alberta, Rocky Mountain and San Juan Basin gas supplies.

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