As the race to move Rocky Mountain natural gas from the Rockies Express Pipeline’s (REX) terminus in Ohio to the Northeast continues to add new entrants, competitors will have to deal with a quickly moving forward pipe proposal from REX itself. The pipeline said Wednesday it has completed a successful nonbinding open season for the Northeast Express Project, a 375-mile extension of REX that would extend the pipeline’s route from Clarington, OH, and add capacity to receive volumes from Lebanon, OH, to the endpoint in Princeton, NJ.
REX officials reported that market interest during the open season exceeded the pipeline’s initial design estimate of 1.5 million Dth/d (see Daily GPI, Oct. 30). 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, natural gas marketers, local distribution companies and power generators.
REX said it plans to begin negotiating binding agreements with these potential customers, noting that if it receives sufficient binding commitments and regulatory approvals the pipeline extension could go into service in late 2010. REX said the proposed expansion “capitalizes on the efficient design of the REX pipeline” and will have a low-cost fuel rate delivering gas to the Northeast.
While there is no lack of gas being produced in the Rockies, the long-standing problem has been getting the gas out of the region due to the lack of takeaway infrastructure. The ambitious REX project will alleviate that issue, but getting that gas out of the REX terminus at Clarington is another story altogether, which is why pipe project proposals are coming out of the woodwork.
Earlier in the week, El Paso Corp.’s Tennessee Gas Pipeline and Equitable Resources Inc. threw their hats into the ring with plans to build a 471-mile pipeline project from Ohio to Northeast gas markets (see Daily GPI, Dec. 11). The Northeast Passage Project would have an initial capacity of 1.1 Bcf/d and would connect with Iroquois Gas Transmission at Pleasant Valley, NY.
National Fuel Gas has said it is seriously exploring the prospect of building a 324-mile pipeline to deliver Rockies gas from Ohio to the Corning, NY, market. National Fuel’s project, called the West to East Project, would be the largest ever tackled by the company (see Daily GPI, Nov. 13). National Fuel’s proposed line, which would move up to 700,000 Dth/d, would be a link between REX and the Millennium Pipeline that is under construction.
In September, Williams’ Transcontinental Gas Pipe Line announced plans to build the proposed Rockies Connector Pipeline, which would extend approximately 250 miles, connecting Transco’s Station 195 in York County, PA, to the eastern terminus of the REX line (see Daily GPI, Sept. 27). The company expects the pipeline to transport approximately 688,000 Dth/d.
Also in September, Spectra Energy’s Texas Eastern Transmission completed an open season for its proposed Northern Bridge, which would carry Clarington-bound gas supplies to the Philadelphia-Camden, PA, metropolitan area (see Daily GPI, Sept. 5). The capacity is expected to be between 200 MMcf/d and 500 MMcf/d.
When completed, the 1,678-mile REX pipeline will have a capacity of approximately 1.8 Bcf/d. Binding firm commitments from creditworthy shippers have been secured for virtually all of the capacity on the pipeline. KMP is overseeing construction of the project and will operate the pipeline.
The first 328-mile segment of REX, which runs from the Meeker Hub in Rio Blanco County, CO, to the Wamsutter Hub in Sweetwater County, WY, and to the Cheyenne Hub in Weld County, CO, is in service and has a current capacity of 500,000 Dth/d. The next segment, REX-West, is a 713-mile, 42-inch diameter pipeline that will extend from the Cheyenne Hub to an interconnection with Panhandle Eastern Pipe Line located in Audrain County, MO. It is anticipated that interim service on REX-West will be available in late December, with full service by February 2008. Subject to receipt of regulatory approvals, it is anticipated that interim service on REX-East — which will connect Audrain County to Clarington — will begin as early as Dec. 30, 2008, and the pipeline will be fully operational by June 2009.
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