Overland Pass Pipeline Co. LLC, a joint venture between ONEOK Partners LP and Williams, announced plans Wednesday to construct and operate a 150-mile pipeline lateral extension in the Piceance Basin to transport natural gas liquids (NGL) to Midcontinent markets. In addition, Williams will build a new 450 MMcf/d NGL processing plant in the basin, where it has its most significant gas production, reserves and development activity.
The lateral pipeline is designed to transport as much as 100,000 b/d of raw NGLs from the Piceance Basin to the 750-mile Overland Pass Pipeline. Overland Pass will extend from Opal, WY, to the Midcontinent NGL hub in Conway, KS (see Daily GPI, May 4, 2006). Williams initiated the 750-mile Overland Pass Pipeline in 2005 to provide an additional outlet for NGL supplies produced at the company’s two gas processing plants in Wyoming (see Daily GPI, Dec. 2, 2005).
“This pipeline lateral is another important milestone for ONEOK Partners and Overland Pass Pipeline,” said ONEOK Partners CEO John W. Gibson. “The projected volumes of natural gas liquids from new and existing plants in the prolific Rocky Mountain region have the potential to exceed our initial supply expectations for the Overland Pass Pipeline.”
ONEOK Partners has been busy on the NGL front as of late. Last week, the company said it wanted to build a 440-mile NGL pipeline that would extend from southern Oklahoma through the Barnett Shale in North Texas to the Texas Gulf Coast (see Daily GPI, March 20).
Construction on the $120 million 14-inch lateral pipeline to the Piceance Basin is expected to begin in the summer of 2008 with start-up scheduled for early 2009.
Williams’ new Willow Creek NGL plant is expected to boost the volume of marketable liquids recovered in the Piceance Basin by more than fivefold, with peak production of nearly 30,000 b/d. Williams’ existing processing plants in the basin now recover 4,500 b/d of NGL. However, the existing processing plants are primarily designed to condition the natural gas to meet quality specifications for pipeline transmission, not to maximize NGL extraction. The Willow Creek facility is expected to recover an additional 20,000 b/d of NGL from Williams’ production at start-up.
The Willow Creek plant is expected to be operational in 3Q2009, subject to permitting and regulatory review.
“The Piceance Basin continues to be Williams’ cornerstone for growing our natural gas production,” said Williams CEO Steve Malcolm. “We will create additional revenues from the same gas stream while setting the stage for our midstream business to provide services to producers in the basin.”
Over the past two years, Williams has nearly doubled its natural gas production in the Piceance Basin, and it now produces 600 MMcf/d in the area. At year-end 2006, Williams’ reserves in the basin accounted for 67% of the company’s 3.7 Tcfe of total proved domestic reserves.
As designed, the Willow Creek facility will consist of a single-train cryogenic plant located in Rio Blanco County, CO, which is about 25 miles northwest of Williams’ existing facilities in Garfield County. Initially, more than half of the plant’s volumes will come from Williams’ production in the Parachute Valley area to the south of the facility. This gas will be transported to the Willow Creek plant via the company’s new Northwest Pipeline Parachute Lateral, a 30-inch-diameter pipeline currently under construction (see Daily GPI, Aug. 18, 2006).
The remaining volumes for Willow Creek’s first train are expected to come from Williams’ newest development areas in the northern portion of the Piceance Basin known as the Highlands. Williams expects its Highlands production to grow by 50% this year.
On both the Overland Pass Pipeline and the Piceance lateral pipeline, ONEOK Partners will initially own 99% of the joint venture and Williams will own the remaining 1%, with Williams having the option to increase its ownership to 50% and become operator within two years of the original Overland Pass Pipeline becoming operational. ONEOK Partners is managing the construction of the Overland Pass project and will be operator of the pipeline. Construction of the Overland Pass Pipeline is expected to begin this fall with start-up expected in early 2008.
Both the pipeline lateral and the Willow Creek NGL plant require the approval of various state and federal regulatory agencies and governments prior to construction.
©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |