Questar Corp. began service last Tuesday on the East Zone of its Southern Trails Pipeline after getting the go-ahead from FERC. But first it received a dressing down from Chairman Pat Wood personally for its failure to promptly comply with certificate conditions.

“I was disappointed to learn that Questar Southern Trails Pipeline Co.’s poor compliance performance and delays in responding to earlier requests had warranted issuance of the enclosed letter [from FERC staff] at this crucial stage of the project. We do not take lightly our responsibility to issue authorization for service commencement in a timely fashion,” he wrote in a June 20 letter to Southern Trails.

Although Southern Trails has since complied with FERC staff’s demands and the East Zone of the pipeline has been approved for service, Wood said he hoped that “similar circumstances may be avoided in the future.”

Southern Trails put the East Zone portion of the pipeline into service immediately. The segment, which originates at the Blanco Hub in New Mexico, will ship 80,000 Dth/d of natural gas supplies from the Rocky Mountains and New Mexico’s San Juan Basin to multiple delivery points at the California border. The eastern leg is expected to reach full capacity by July, according to Questar. Southern Trails has negotiated long-term contracts for the entire capacity on the East Zone, said spokesman Curt Burnett.

The East Zone covers 490 miles of the entire 700-mile, 16-inch diameter Southern Trails system, a converted crude oil pipeline that Questar purchased from Arco in late 1998 for $38 million. The cost of the conversion to natural gas was estimated at $100 million.

Burnett was unable to say when the 120,000 Dth/d, 210-mile West Zone would go into service. The project is being held up by California regulators, he told NGI. Southern Trails “has had a lot of regulatory problems in the state of California…California is not interested in opening up its lines to outside companies,” according to Burnett.

Questar originally proposed Southern Trails as a competitive alternative to Southern California Gas, which has had a lock on the Southern California gas market for years.

“Now that we’ve begun service on Southern Trail’s eastern zone, we are turning out attention to marketing capacity on the California portion [West Zone] of the pipeline,” said Questar Pipeline President Nick Rose. “The western zone runs through the heart of industrial and commercial areas in Southern California and could provide a new, reliable source of gas.”

While efforts continue to put the West Zone of the pipeline into service, the company said it has been forced to consider alternative uses for this portion, including sale or possible conversion to other uses, due to unfavorable regulatory decisions in California.

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