NGI The Weekly Gas Market Report
Pipeline competition in the Rockies is heating up with a newpipeline project launched last week by Williams and changes to aplanned extension announced by rival Trailblazer Pipeline.
Williams is holding a non-binding open season through Sept. 21to solicit expressions of interest for firm transportation on theproposed Western Frontier Pipeline from the Cheyenne Hub innortheastern Colorado to Hugoton Station on Williams’ Centralpipeline system in southwest Kansas. Western Frontier would be amajor new line, extending 320 miles with 13,000 hp of compressionand 540,000 Dth/d of gas transportation capacity.
“Additional natural gas supply options are vital in today’sincreasingly competitive energy marketplace. We believe the WesternFrontier Pipeline would be a cost-effective way to bringhighly-competitive supplies from the Rockies into theMidcontinent,” said Kim Cocklin, vice president of customer service& rates for Williams’ Central and Texas Gas systems. Williams’plans put the pipeline in service Nov. 1, 2003. The project’s costhas not been finalized.
The project would compete with another expansion proposed byTrailblazer. Both are designed to bring increasing gas productionprimarily from the Powder River Basin to markets in theMidcontinent and Midwest regions. The Powder River is a relativelynew gas play in Wyoming and Montana where shallow coal-bed methanedeposits can be produced quickly and inexpensively. The basin hasbeen estimated to hold between 10 and 30 Tcf of gas reserves.Production is expected to ramp up to more than 1 Bcf/d over thenext few years.
“In essence, both get gas down into the pipelines in the Midcontinent area,” said Trailblazer’s Ron Brown. Trailblazer just completed an open season for an expansion/extension that was first announced in June (NGI, June 19). The project includes an expansion of its existing 436-mile pipeline system, which runs from Colorado through Southeastern Wyoming to Beatrice, NB. Trailblazer plans to install two new compressor stations, add additional horsepower at compressor station 602 and perhaps construct some 36-inch loop. In addition, the open season also was needed to test interest in a 149-mile, 24-inch diameter extension from Cheyenne, CO, to Glenrock, WY.
The extension project has been shelved, said spokesman Ron Brown. It would have interconnected with Thunder Creek Pipeline, Kinder Morgan Interstate Gas Transmission and Fort Union Pipeline at Glenrock, but plans by Colorado Interstate and Wyoming Interstate, two Coastal Corp., subsidiaries, to expand their existing Medicine Bow lateral forced the cancellation, said Brown (see related story).
“Before we were offering to do either an expansion/extension orjust an expansion, but we’re just going to come out with anexpansion project now of 300 MMcf/d,” he said. “We’re shooting forDecember 2002.
“CIG is expanding their Medicine Bow lateral and they could havethat in quicker than we could do an extension of Trailblazer,” heexplained. “They had an open season and were one year ahead of usso we decided to just build an expansion.”
CIG announced last week it plans to loop the existing MedicineBow lateral with 155 miles of 36-inch diameter pipe and plans toadd 14,340 hp of compression at a cost of about $168 million. Theadditional facilities will boost capacity by 675 MMcf/d to 1.05Bcf/d. The lateral extrends from the southern end of the PowderRiver Basin near Douglas, WY, to Wyoming Interstate’s mainlinesouthwest of Cheyenne, WY.
However, Brown said the market response to the Trailblazerexpansion project was “huge. We’ve been through several rounds andpeople have exercised their management outs so what we’re doing isgoing out with a new open season that is binding. That is supposedto come out this afternoon and run through Aug. 18.”
Kinder Morgan Energy Partners, L.P. owns a two-thirds interestin Trailblazer, with the other one-third interest owned by EnronTrailblazer Pipeline Company, a subsidiary of Enron Corp.Trailblazer is operated by Natural Gas Pipeline Company of America(NGPL), a subsidiary of Kinder Morgan, Inc. To obtain moreinformation on the open season, shippers should contact Ron Brownat (713) 369-9290.
A summary of Williams’ Western Frontier project, including an expression of interest form, is available at https://wgpcentral.twc.com/. Additional information about the project also is available from Donny King, manager of business development for Williams’ Central system, at (270) 688-6968.
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