El Paso Announces Piceance Basin Expansion

El Paso Pipeline Partners will expand its Wyoming Interstate Company (WIC) Piceance basin lateral pipeline to transport growing natural gas supplies from producing areas in Colorado.

The $62 million project provides 230,000 Dth/d of new capacity through installation of an additional 25,300 horsepower of compression at the WIC Greasewood Compressor Station in western Colorado and at a new Midpoint Compressor Station in northwestern Colorado.

Initially, 50,000 Dth/d of new capacity will be in service by the fourth quarter of 2008 and the remainder by the fourth quarter of 2009, subject to regulatory approvals. An open season closed on Nov. 20, 2007, and the capacity was fully subscribed.

"This expansion project comes at a critical time for Rockies producers to move additional natural gas supplies to consuming regions by 2008 and beyond," said Jim Yardley, president and CEO of El Paso. "The Piceance expansion further illustrates the important need for additional long-haul export capacity, such as the Ruby Pipeline Project separately announced by El Paso Corporation earlier this month, to serve constrained Rocky Mountain natural gas supplies."

The Piceance Lateral Expansion Project will be funded using current revolving credit facilities. It is expected to increase cash available for distribution by $4 million in 2010 and $12 million in 2011.

WIC's existing 24-in., 142-mile Piceance basin lateral pipeline delivers natural gas to the WIC Mainline and to Colorado Interstate Gas at Wamsutter, and then to points at Kanda and Opal, or Cheyenne, in Wyoming via WIC's Mainline. The existing Piceance basin lateral was already fully contracted with a capacity of 350,000 Dth/d.

Shippers in the binding open season that closed Nov. 20 subscribed to an additional 230,000 Dth/d, which will bring the lateral's total capacity to 580,000 Dth/d once the expansion is complete. The successful bidders in the Nov. 20 open season elected to deliver their natural gas at Opal and also committed to WIC Mainline capacity.