The state of Wyoming has jumped on board as a partner in the ambitious cross-country gas pipeline project announced a few weeks ago by Kinder Morgan Energy Partners and a unit of Sempra Energy.

According to a memorandum of understanding, the Wyoming Natural Gas Pipeline Authority (WNGPA) will support the $3 billion, 1,500-mile, 2 Bcf/d project by signing up for 200 MMcf/d of firm capacity on the system, and possibly using some of its $1 billion in bonding authority to provide financial support for the project, including a possible extension from the Wamsutter Hub in Wyoming to the Opal Hub. The 42-inch diameter pipeline would bring gas from the Rockies to the Northeast, terminating in eastern Ohio.

The WNGPA was formed by the state legislature to facilitate production and transportation of Wyoming natural gas. The agency held a public meeting on Wednesday to consider its role in the pipeline project and approved entering into exclusive negotiations with KMP and the Sempra affiliate.

“I am extremely pleased with the progress Kinder Morgan and Sempra have made and look forward to encouraging the support and participation of the Authority in this project,” said Bryan Hassler, executive director of WNGPA. “This is exactly the kind of project the Authority was formed to encourage and support.”

Scott Parker, president of Kinder Morgan’s natural gas pipelines group, and George Liparidis, president of Sempra Pipelines & Storage, called the WNGPA’s involvement “an important step in the viability of this project,” which will provide needed gas takeaway capacity for producers in Wyoming, Colorado and Utah. The project also is designed to bring Rockies gas prices closer in line with the premium markets in the east by providing direct access to the growing Northeast market via interconnecting pipelines. The Midwest and Northeast markets will benefit by having new access to another long-lived supply source that is not subject to hurricane related outages.

The many benefits of building such a pipeline prompted El Paso to come up with a plan of its own this week that is similar to the Kinder Morgan-Sempra project (see Daily GPI, Oct. 5). El Paso’s Continental Connector project would be a new 1,000-mile pipeline system that would ship 1-2 Bcf/d of Rockies gas east by connecting six of El Paso’s existing pipelines. Colorado Interstate, Wyoming Interstate and Cheyenne Plains in the West would be linked with ANR Pipeline, Tennessee Gas, and Southern Natural in the East. El Paso said the project could be placed in service as early as November 2008. A nonbinding open season began Tuesday and will run through 5 p.m. CST Nov. 4 to solicit interest on the proposed pipeline.

Kinder Morgan and Sempra said with the support of the WNGPA, the Wamsutter-to-Cheyenne portion of their project could be completed by year-end 2006. The Cheyenne-to-Midwest portion would be completed by year-end 2007, and the eastern portion of the project, providing direct access to markets in the Northeast, is expected to be in service in late 2008 or early 2009.

Kinder Morgan and Sempra will share responsibility for development. Sempra also has agreed to bid for 200 MMcf/d of firm capacity on the system that it will use to serve distribution utilities on the East Coast. Kinder Morgan would own two-thirds of the equity in the pipeline and Sempra would own one-third. For more information on the project contact Jeff Rawls at Kinder Morgan (303) 914-4903, Ryan O’Neal at Sempra (619) 696-4585 or Bryan Hassler at the Wyoming Natural Gas Pipeline Authority (303) 748-6473.

Information on El Paso’s project can be found at https://www.elpaso.com/business/ContinentalConnector.shtm.

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.