Cheyenne

A barely higher Cheyenne Hub in the Rockies was the only point that avoided falling prices Wednesday. The factors that have caused softness in post-Christmas trading at nearly all points were unchanged — light heating load due to unseasonably moderate weather for late December, prior-day futures weakness and bearish attitudes about abundant storage.

Wyoming Interstate Co. reported completion of repairs late Thursday afternoon to a segment west of Cheyenne Station where a rupture had occurred on the previous Saturday (see Daily GPI, Nov. 14) and said it was fully available for service again.

Citing welding delays in repairing a Saturday rupture west of Cheyenne Station (see Daily GPI, Nov. 14), Wyoming Interstate Co. said it was required to maintain a curtailment of mainline capacity through its Laramie East constraint point to zero through at least Wednesday. Flow through the Medicine Bow Lateral was not impacted, WIC said. “At this time, WIC anticipates that it will be able to accept nominations…Wednesday for its full Wyoming mainline capacity” in the Timely cycle for Thursday’s gas day, the pipeline said.

Wyoming Interstate Gas Co. and Colorado Interstate Gas Co. declared a Force Majeure due to third party damage of the WIC pipeline just west of the CIG/WIC Cheyenne compressor station (see related story). All transport volumes on WIC through Laramie Station have been shut in and will be scheduled to zero until further notice. Transportation through the Medicine Bow lateral will not be affected. CIG has 246 MMcf/d of capacity on the WIC system and that volume along with all other WIC volumes moving through Laramie WIC station is being affected.

Wyoming’s Bureau of Land Management will offer 84,015 acres of federal land in Wyoming in an oral oil and gas lease auction on Tuesday, June 6, at the Holiday Inn in Cheyenne. The sale includes a total of 128 parcels, including 13 parcels totaling 12,495 acres in the Bridger Teton National Forest and two parcels totaling 1,526 acres in the Shoshone National Forest. “Mineral resources on Wyoming public lands play a key role in meeting energy demands in the Rocky Mountain Region. With one-third of the nation’s oil and gas production coming from the public lands, oil and gas leasing helps increase domestic production of clean-burning natural gas and other mineral resources,” said Wyoming BLM State Director Bob Bennett. Oil and gas operations on BLM-administered lands in Wyoming produced 29.8 million bbl of oil and 1.4 Tcf of gas in 2005. About 64% of the homes in Wyoming are heated with natural gas. The auction rules call for a $2 per acre minimum bid in bonuses on any parcel. This means a buyer will pay the bid price for the right to obtain the federal lease, in addition to a standard $1.50 per acre rental on the lease. BLM also will charge winning bidders $130 per parcel to help cover administrative costs. If the lease becomes producing, the federal government will collect a royalty on production. Last year, $799.2 million in royalties were collected and shared equally with Wyoming. Leases are for a primary term of 10 years, and will be continued as long thereafter as oil or gas is produced in paying quantities. The complete list of parcels is available on the Wyoming BLM web site at: www.wy.blm.gov/minerals/og/leasing/oilgasleasing.html.

Williams Gas Pipeline has filed an application for a new $365 million pipeline that would extend from the Cheyenne hub in northern Colorado to multiple pipeline interconnections in southwestern Kansas and the panhandle of Oklahoma. The Western Frontier Pipeline would consist of 400 miles of 30-inch diameter pipe and 30,000 horsepower of compression. It would transport up to 540,000 Dth/d of gas to markets in the Midcontinent.

Wyoming Interstate said a unit will be removed from service atthe Cheyenne WIC Compressor Station March 7 and 8. Capacity throughthe station will be reduced by 75 MMcf/d, but impact to serviceshould be minimal.

Public Service Co. of Colorado and Cheyenne (WY) Light Fuel andPower will continue to refuse imbalance payback gas at leastthrough today’s gas day. If operational constraints from warmregional weather continue, the two utilities said, the paybackrestriction will be extended.

Public Service Co. of Colorado and Cheyenne (WY) Light Fuel& Power will implement Operational Balancing Procedures in allareas effective Saturday and Sunday. The effect is to requireshippers to cut nominations to a level that does not exceedestimated daily consumption taken from a previous “Model Day” (inthis case July 4, 1999). Imbalance paybacks will not be allowedduring the OBP period.