February 14, 2007 / 10:47 PM / 11 years ago

Segment of Rockies Express natgas line begins service

NEW YORK, Feb 14 (Reuters) - The second segment of the first leg of the huge Rockies Express (REX) natural gas pipeline project began service on Wednesday, operator Kinder Morgan Energy Partners KMP.N said in a statement.

The 1,663-mile Rockies Express pipeline, when completed in 2009, will be one of the largest natural gas pipelines ever constructed in North America.

The $4.4 billion REX pipeline will transport up to 1.8 billion cubic feet per day of natural gas from producing basins in Wyoming and Colorado to major gas consuming markets in the upper Midwest and eastern United States.

The 192-mile, 42-inch diameter line brought into service Wednesday ships gas from the Wamsutter Hub in Wyoming to the Cheyenne Hub in Colorado.

The first segment of the project - 136 miles of 36-inch diameter pipeline from the Meeker Hub in Colorado to the Wamsutter Hub - began interim service in February 2006.

Capacity on the two pipeline segments, currently at 500 million cubic feet per day (mmcfd), will increase to 750 mmcfd when the Enterprise Gas Processing plant at Meeker goes into service later this year.

“We expect to receive the FERC certificate for REX-West this spring and commence construction shortly thereafter,” said Scott Parker, president of Kinder Morgan Energy Partners Natural Gas Pipelines.

REX-West will consist of 713 miles of 42-inch diameter pipeline from Weld County, Colorado, to Audrain County, Missouri, and has a targeted in-service date of December 2007.

REX-East, a 622-mile segment from eastern Missouri to the Clarington Hub in Ohio is expected to be in interim service as early as Jan. 1, 2009, and fully completed by June 2009.

These projected dates are subject to regulatory approvals.

    Binding firm commitments from credit-worthy shippers have been secured for virtually all of the capacity on the pipeline.

    KMP operates REX and owns 51 percent of the equity in the project, which will become 50 percent when construction of the entire project is completed.

    The general partner of KMP is owned by Kinder Morgan, Inc. (KMI.N), one of the largest energy transportation, storage and distribution companies in North America.

    Sempra Pipelines & Storage, a unit of Sempra Energy (SRE.N), has a 25 percent ownership interest in the project.

    ConocoPhillips (COP.N), an integrated petroleum company headquartered in Houston, owns a 24 percent interest in the project with an additional 1 percent interest to be acquired after pipeline construction is completed.

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