El Paso Corp.’s Wyoming Interstate Company (WIC) said there is insufficient demand for it to move forward with its flow reversal and expansion project, which would have brought as much as 550,000 Dth/d of Powder River Basin production to Kanda, WY, and to Kern River Gas Transmission at the Opal Hub from the Cheyenne Hub in northern Colorado.

Kern River recently doubled its pipeline capacity to 1.7 Bcf/d and the WIC project was viewed as important component of the significant changes taking place in northern Rockies gas transportation.

WIC had proposed to modify existing compressor stations and construct 60 miles of new pipeline to allow east-to-west flow of gas. The capacity of the expansion would be 300,000 Dth/d if 24-inch diameter pipe were used or 550,000 Dth/d if 36-inch diameter pipe were used. New interconnects would be installed with Kern in the Opal area. And deliveries to Overthrust and Questar would be made at Kanda. The project was expected to be in service by May 2005 with a possibility for earlier service to Kanda.

The pipeline concluded a binding open season on April 30 but received only one signed precedent agreement for 20,000 Dth/d for service from Cheyenne to Kern River. No bids for reversal of flow to Overthrust were received.

“As this result illustrates, there is insufficient market demand to support the expansion of WIC’s system to flow west at this time,” the company said. However, WIC plans to hold a third open season later this summer to determine if market demand will then support the project.

Uncertainty over further gas development in the Powder River Basin due to legal wrangling over a recent environmental decision may have delayed project support, according to some observers. Many view the project as a necessary addition to the gas grid in the region because of the need to provide a western outlet for burgeoning Powder River Basin production.

Any parties still interested in supporting a WIC reversal and/or extension are encouraged to call Greg Ruben 719-520-4870 or Scott Dalene 719-520-4819.

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