CONNING CHU Associated Press writer | Posted: Thursday, February 28, 2008 12:00 am
CHEYENNE - El Paso Western Pipelines, the largest transporter of natural gas in North America, presented plans Wednesday for a pipeline that will carry natural gas from producers in the Rocky Mountains to the high-demand market of northern California.
El Paso Vice President Tom Price laid out the $2 billion Ruby Pipeline project at a Wyoming House Minerals, Business, and Economic Development Committee meeting.
Pending approvals, El Paso plans to start construction in 2010 on the line, which would run from Opal in southwest Wyoming to Malin on the California-Oregon border.
Brian Jeffries, executive director of the Wyoming Pipeline Authority, said the project will likely help bring Wyoming natural gas prices up after two years of depression.
Jeffries said wholesale natural gas prices for Wyoming producers averaged $4.50 per thousand cubic feet last year, compared with a $7 average in other gas-producing states.
This month, Wyoming prices reached $7 per thousand cubic feet, partly because of cold temperatures and the opening of the Rockies Express, a pipeline that started transporting gas from the Rocky Mountain region to the Midwest in January.
Jeffries attributed the price dip of previous years to the Rockies' insufficient supply of pipeline systems. The lower prices means a loss of hundreds of millions of dollars in state revenues for taxed gas, he said.
Jeffries said the Ruby Pipeline is one of many proposed pipeline projects that could help Wyoming bring gas prices up again.
"We have to start building now," Jeffries said. "We want this to move as quick as possible."
Price said El Paso already forged a partnership with Pacific Gas & Electric, a major California energy supplier, to build the pipeline. Pacific has committed to buying gas transported by the pipeline.
Price said he has also been in talks with most of the Rockies' gas producers to supply gas.
Pacific Gas & Electric will need to get state regulatory approval for the project by the end of October for the construction to continue. Price said El Paso hopes to have the pipeline in service by March 2011.
The Ruby Pipeline is one of three possible natural gas pipelines proposed to run from the Rockies to California.
Spectra Energy solicited investors last month to help fund the Bronco Pipeline that would also transport gas produced in Colorado, Utah and Wyoming to Northern California consumers.
A 500-cubic-feet expansion of the Kern River pipeline proposed in 2003 will bring Rockies gas to Southern California.