An open season for up to 100 MMcf/d of firm transportationcapacity in the Sacramento Delta region of northern California isset for May 10 through the end of June by Western Gas Resources(WGR), which is planning to make an existing gas pipeline,gathering and delivery system an open-access, state-regulatedoperation. The state regulatory process to make the change willbegin June 8 with a pre-hearing conference in San Francisco.
Based on initial informal support for the project, which willmove gas to the heavily industrialized East San Francisco Bay area,Western expects it to be fully subscribed with producers, marketersand large industrial customers, according to Rick Maceyka, managerof Western’s Pacific Region. Maceyka said the project has received”quite a bit of support from local gas producers in the area.”
“We’re asking for binding expressions of interest, but since wedon’t yet have the [California Public Utilities Commission]certificate to operate, the deals can’t really be binding. So, itwill be binding contingent on us getting a certificate we can livewith. If the California commission imposes some substantialcondition or surcharge that significantly reduces the economicvalue to transport, then we’re obviously not going to hold thesubscribers to the contracts. Who knows what the possibilitiesare?”
The timetable, scope, hearing schedule and issues for the stateregulatory proceeding will be set at the pre-hearing conference,according to a San Francisco-based CPUC spokesperson. “It lookslike a fairly extensive proceeding,” the spokesperson said. “Itcould be concluded this year or next, but in any case, it will be along one.”
Maceyka estimates the case could be wrapped up by the end ofthis year, using filings by merchant gas storage operators in thegeneral area as a yardstick. Western Gas proposes to buy thepipeline system from its current owner, Aera, an alliance betweenShell and Mobil oil companies, and interconnect them with PacificGas and Electric Co.’s existing backbone gas transmission pipelinesystem at the expanding Denverton Creek gas field. The sponsorsintend to upgrade the pipeline network with compression,odorization and the PG&E interconnect, all of which hasrequired it to make an environmental assessment of its operationsfor the impending regulatory hearings. Maceyka doesn’t foresee anyundue environmental issues slowing down the proceedings.
Gas supplies totaling about 70 MMcf/d are located within a10-mile corridor formed by the Steelhead Pipeline and another 30MMcf/d is estimated along the Sacramento River Pipeline. Togetherthey make up the Shell-Mobil holdings that Western Gas intends touse to flow both local and Canadian supplies through PG&E’stransmission system for sale to large refineries, power generationplants and other large industrial loads in the East Bay area.
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