KMEP to expand carbon dioxide operations

Kinder Morgan Energy Partners LP will expand the 91-mile Eastern Shelf Pipeline extending to a project near its Katz field, shipping more 130 MMcfd of carbon dioxide via the pipeline starting in 2014. Additional pump stations will provide the extra capacity.

The contract for additional supplies shipped on Eastern Shelf was one of five new CO2 sales contracts KMEP entered during the first quarter, totaling more than 2 tcf combined with aggregate contract quantities exceeding 440 MMcfd at their peak. The company said the newly contracted CO2 volumes, the majority of which are contracted by third-parties, will support new and existing flood projects operated by the purchasers in the Permian basin of West Texas and have a volume weighted average term of nearly 16 years.

KMEP is expanding its Doe Canyon Unit CO2 source field in southwestern Colorado to increase capacity from to 170 MMcfd from 105 MMcfd. The expansion will include installation of both primary and booster compression with construction beginning this quarter. KMEP expects the primary compression to enter service fourth-quarter 2013 and the booster compression second-quarter 2014.

The company plans to drill 19 more wells during the next 10 years to achieve the increased production.

KMEP also recently closed on its previously announced acquisition of the St. Johns CO2 source field and related assets located in Apache County, Ariz., and Catron Country, NM. Well testing and predevelopment activities are under way for this potential new source field.

Contact Christopher E. Smith at chriss@ogjonline.com.

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