With last weekend’s on-schedule opening of approximately 500 miles of Rockies Express-West (REX-West) under their belt, pipeline officials have set their sights on two more milestones in the epic project: reviving a long-shelved idea with Kinder Morgan’s Natural Gas Pipeline Co. of America (NGPL) to serve Chicago and opening REX’s Northeast Express.
The joint REX/NGPL project, connecting the Meeker and Opal hubs to Chicago, would provide the city its first direct seamless access to growing Rocky Mountain gas supply, Kinder Morgan’s Bob Mishler said Tuesday at a meeting of the Wyoming Pipeline Authority.
Three years ago Kinder Morgan officials argued against the idea of building a bullet line to take Rockies gas directly into the Chicago area, but now, with the availability of Canadian gas declining and approximately 500 Bcf of storage available in the market, the project looks more promising. Chicago has an average daily demand of almost 4 Bcf and peak-day demand exceeding 10 Bcf, Mishler said.
The project is in its early stages, with preliminary designs yet to be completed and initial cost estimates not yet finalized. REX expects to begin discussions with potential shippers late this month, and a binding open season could be conducted beginning in September. The pipeline could be in service in October 2011.
Mishler also said REX’s Northeast Express — 375 miles of new 42-inch diameter pipeline, which will extend REX’s route from Clarington, OH, and add capacity to receive volumes from Lebanon, OH, to the endpoint in Princeton, NJ — is scheduled to be in service by the end of 2010.
Last month REX officials reported that requests for service during an open season for the Northeast expansion totaled more than 1.8 Bcf/d, exceeding the pipeline’s initial design estimate (see Daily GPI, Dec. 13, 2007). REX, a $4.4 billion joint venture of Kinder Morgan Energy Partners LP (KMP), Sempra Pipelines and Storage and ConocoPhillips, said interested parties included natural gas producers, marketers, local distribution companies and power generators. REX is currently meeting with potential shippers, clarifying design requirements and firming up shipper commitments, Mishler said.
Mishler said REX will submit to FERC an application for Northeast Express by Feb. 1, 2009 and anticipates regulatory approval by December 2009. Construction on the project could begin in April 2010. The project will provide expanded capacity between Lebanon and Clarington of up to 1 Bcf/d, four additional receipt points on expansion, two bidirectional interconnections at Oakford, PA, and two bi-directional interconnections near Perulack, PA.
REX began interim service last Saturday with capacity of about 1.4 Bcf/d on approximately 500 miles of REX-West from the Cheyenne Hub in Weld County, CO, to the ANR delivery point in Brown County, KS (see Daily GPI, Jan. 15). The operational section of the pipeline also includes delivery points to Kinder Morgan Interstate Gas Transmission, Northern Natural Gas Co. and NGPL. The remaining 213-mile section of REX-West will continue eastward to Audrain County, MO, and is expected to be in service in early February, at which time capacity will increase to about 1.5 Bcf/d. REX officials said they expect to begin deliveries at Clarington near the end of the year. In total, REX-West is a 713-mile, 42-inch diameter pipeline.
The eastern segment of project, known as REX-East, will extend 640 miles from Missouri to Clarington. That portion of the project has received a favorable draft environmental impact review at FERC (see Daily GPI, Nov. 27, 2007), and service could begin as early as Dec. 30 to be fully operational by June 2009.
When completed the 1,678-mile pipeline will have capacity of approximately 1.8 Bcf/d.
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