FERC yesterday gave a preliminary nod to Questar Pipeline’sapplication to build a 75.6-mile, 272,000 Dth/d pipeline looprunning from northeastern Utah to the north central part of thestate. The proposed facilities would transport to western marketsthe growing coal-seam natural gas production near Price, UT, andthe volumes delivered to Questar from Colorado Interstate Gas’sUinta Basin Lateral at Natural Buttes.

In a preliminary determination on non-environmental issues, theCommission found Questar’s project to be in the “public convenienceand necessity.” Absent “pre-approval for roll-in rate treatment,”which Questar had sought, the so-called M.L. (Main Line) No. 104project “can proceed without subsidies from, or degradation inservice to, its existing shippers and will provide benefits thatoutweigh any adverse impacts,” the order said [CP00-68].

Specifically, “we find that the proposed expansion will providedirect pipeline access to new natural gas supplies, will satisfythe growing demand of end-use customers along the Wasatch Front [innorth-central Utah], and will bring additional gas supplies todownstream western markets served by Kern River [GasTransmission],” it noted.

In its application filed last January, Questar noted that itsexisting M.L. Nos. 40 and 41 transportation systems were beingovertaxed due to the growth in the development of coal-seam gasreserves in Price and the rising peak-day requirements of gascustomers along the Wasatch Front. The proposed 24-inch M.L. No.104 expansion seeks to solve that problem, looping the westernmostsegment of its M.L. No. 40 line and all of the M.L. No. 41 line. Itwould extend from Price, UT, to an interconnection with Kern Rivernear Elberta, UT.

Questar said it plans to sell 50% of its ownership interest inthe proposed new facilities to CIG Gas Supply Co. when the line isplaced into service. CIG Supply, in turn, would lease its 50%undivided interest in M.L. No. 104 back to Questar under a 331/3-year lease, giving Questar full custodial and operationalrights.

The Commission said Questar had demonstrated “significantevidence” of market need for the new line, given that it hasexecuted four firm transportation agreements with three customersfor 270,000 Dth/d of the project’s capacity. The customers includeCIG Resources, Questar Gas and Texaco Natural Gas. The agreementwith CIG Resources is not binding.

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