El Paso Proposes New System from Rockies to Connect Six Major Gas Pipelines
El Paso Corp. proposed Tuesday to build the Continental Connector, a new system with more than 1,000 miles of up to 42-inch pipe to ship 1-2 Bcf/d of Rockies gas East by connecting six of its pipelines in the west, Colorado Interstate, WIC and Cheyenne Plains, with points on ANR Pipeline, Tennessee Gas Pipeline, and Southern Natural Gas. 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.
The proposal has a similar goal as one proposed by Kinder Morgan Energy Partners LP (KMP) and Sempra Pipelines & Storage, which entered into a memorandum of understanding (MOU) in August to develop a 1,500-mile interstate gas pipeline to link producing areas in the Rockies to market areas in the upper Midwest and eastern United States (see Daily GPI, Aug. 18).
Depending on the results of the open season, several El Paso pipelines could be involved in the final project, said Media Director Richard Wheatley. The new pipe would include a segment from Greenburg, KS through Oklahoma and Arkansas to Perryville, LA. Currently, El Paso's pipe system carries Rockies gas to Chicago and the upper midwest, while Gulf supplies flow to the upper Midwest, Southeast and Northeast.
As now envisioned, the project is divided into three segments:
- The Upstream Segment is generally defined as existing and new points of receipt along the WIC, CIG and Cheyenne Plains pipeline systems (or along their paths) terminating at the Greensburg, KS Hub;
- The Central Segment from Greensburg, to points of interconnection with the Tennessee, ANR and Southern Natural Gas pipeline systems in the vicinity of the Perryville, LA Hub; and
- The Downstream Segment would be flexible, moving from the Central Segment's terminus to existing and new points of delivery to or along downstream pipelines serving the Midwest, northern and southeastern markets.
El Paso also is soliciting interest from the Barnett Shale Basin in Texas for a new lateral delivering into the Central Segment, Wheatley said. The company also will consider other alternatives, depending on the results of the open season.
Besides its interconnections with El Paso pipes, Wheatley said the company also envisions access to other, nonaffiliated pipelines, which could include, but not necessarily be limited to, NGPL, Texas Eastern, Texas Gas, MRT, Columbia, Williams, Transco and/or others through both existing and new interconnects.
"There is still a lot of flexibility out there, depending on what new pieces are needed or would be needed...what shippers tell us they need," said Wheatley.
Wheatley said the project had been in a "study mode" for some time, but El Paso believed it was now the right time to move forward. The actual size, connections and costs of the project won't be determined until El Paso reviews the results of the open season.
The project is intended to provide firm and interruptible transportation services on the Central Segment. Capacity on the Upstream and Downstream Segments will be scoped to accommodate acceptable bids or be in accordance with the parameters of any potential future open seasons.
El Paso expects to offer annual firm service through a recourse or a negotiated rate. The recourse rate would be based upon traditional straight-fixed variable rate design, and the minimum term for firm service is expected to be 15 years. El Paso also would consider term-differentiated negotiated rates for firm contract terms of 10-20 years. Participants in the non-binding open season should specify their preferred receipt and delivery points.
A copy of the guidelines and forms for participating in the open season are available at El Paso's Continental Connector
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