By the OGJ Online Staff
HOUSTON, Oct. 5 -- Subsidiaries of Western Gas Resources Inc., Denver, and Questar Market Resources Inc., part of Questar Corp. in Salt Lake City, are forming a joint venture to provide gas gathering and compression services in the Hoback Basin of southwest Wyoming, officials said Friday.
Mountain Gas Resources Inc. and Questar Gas Management Co. will contribute unspecified assets to the joint venture Rendezvous Gas Services LLC, which will construct and operate gas pipeline and compression facilities with the capacity to move some 275 MMcfd of gas from the Hoback Basin, which includes the Pinedale Anticline and Jonah fields.
"The Pinedale Anticline has the potential to be one of the most prolific natural gas fields in the Rocky Mountain region, with industry estimates of up to 4 tcf of reserve potential," said Lanny Outlaw, CEO and president of Western Gas.
"Rendezvous strategically enhances our existing gathering and processing opportunities in the area and gives us an opportunity to provide midstream services to new drilling activity developing in the Hoback Basin north of the Pinedale Anticline," he said.
The joint venture will deliver gas to Mountain Gas' Granger plant and to the Blacks Fork plant for blending and processing. Questar Gas Management is operator and 50% owner of the Blacks Fork plant.
Officials said Rendezvous already has "significant commitment" of gas from existing and future reserves in the Pinedale Anticline and other Hoback Basin areas. Gas reserves from more than 179,000 gross acres currently are committed to the joint venture under existing gathering dedications, they said.
Rendezvous plans to spend about $15.5 million for an initial phase of pipeline and compression expansions starting late this year, officials said. A second expansion phase of some $28 million is being evaluated with construction expected to begin in mid-2002.
Rendezvous' initial expansion also will provide critical gathering capacity for equity production developed by the joint venture partners in the Pinedale Anticline while improving midstream economics through consolidated operation, officials said.