Questar announces new pipeline project
JEFF GEARINO Southwest Wyoming bureau | Posted: Wednesday, March 26, 2008 12:00 am
GREEN RIVER - Two leading pipeline companies are joining forces to develop the next major natural gas pipeline out of the Rockies.
Questar Overthrust Pipeline Co. and Alliance Pipeline Inc. announced Tuesday they have entered into an agreement to develop the approximately 800-mile-long Rockies Alliance Pipeline.
The planned 42-inch pipeline would originate in Wamsutter in eastern Sweetwater County, move north through the gas-rich Powder River Basin in northeast Wyoming and end at the Emerson trading hub on the Minnesota/Canada border.
The proposed pipeline represents another lifeline for Wyoming's natural gas industry, which provides about one-third of state government revenue. Expanding export capacity is critical to sustaining the Rockies natural gas boom, according to industry officials.
"We're always in favor of new (pipeline) infrastructure … so this is good news for Wyoming," said Brian Jeffries, executive director of the Wyoming Pipeline Authority.
"More pipelines being proposed out of Wyoming and/or the Rockies in general are always helpful for the price of gas … from the standpoint of state tax revenues being improved when the price of gas is higher," Jeffries said in a phone interview Tuesday.
Rising gas production in Wyoming and the Rockies has approached pipeline export capacity, which drove prices well below national averages in 2007.
The new pipeline should help ensure reliability of natural gas pipeline infrastructure in the region, Jeffries said.
Company officials said the timing of the project couldn't be better.
"Alliance and Questar Pipeline are teaming up to offer our customers seamless natural gas transportation from multiple (Rocky Mountain) basins to growing natural gas markets in the East," Questar President and CEO Allan Bradley said in a release.
"This is a project whose time has come," he said.
Bradley said the two companies will work with prospective shippers to determine the most efficient size, route and timing of in-service date for the new pipeline. He said a "binding open season" for shipping contracts will begin May 1.
Bradley said depending on shipper commitments to the new system and the pace of regulatory approvals, the pipeline is expected to be placed into service in late 2011.
Another big one
The proposed Rockies Alliance Pipeline would connect the fastest-growing natural gas producing region in North America, the Rockies, with robust natural gas markets in the Midwest and in central Canada.
The pipeline aims to interconnect with downstream pipelines - including the Alliance Pipeline, Northern Border, Great Lakes Transmission and TransCanada Pipeline - to provide direct access to the Chicago Hub, upper Midwest and Northeast markets.
The natural gas transportation industry has added several new pipelines and expansions of existing infrastructure in recent years in an effort to flow more gas out of Wyoming and the Rockies.
The 42-inch-diameter Rockies Alliance Pipeline will have the same capacity as the region's newest pipeline, the massive $4.4 billion Rockies Express pipeline.
That 1,663-mile pipeline is one of the largest pipelines ever constructed in North America and is being built by Kinder Morgan Inc. It transports gas from a station in northern Colorado to Missouri by way of the Cheyenne Hub.
Jeffries said more than 90 percent of the natural gas produced in Wyoming is exported from the state.
"Natural gas is essentially produced for export … so with all these pipeline projects, the key thing is getting the support from shippers," he said.
"Pipeline companies don't build these (projects) on speculation - they only build them when there's support in the form of contracts to take the space," Jeffries said. "We look forward to helping any and all pipeline companies get that support."
Southwest Wyoming bureau reporter Jeff Gearino can be reached at 307-875-5359 or at gearino@tribcsp.com.