KMEP to expand carbon dioxide systems in Colorado, New Mexico

Kinder Morgan Energy Partners LP (KMEP) reported it will invest $671 million to expand its carbon dioxide infrastructure in southwestern Colorado and New Mexico.

The company plans to expand its CO2 production operations in the Cow Canyon area of the McElmo Dome source field in Montezuma County, Colo., and expand the 500-mile Cortez Pipeline that transports CO2 from southwestern Colorado to eastern New Mexico and West Texas for use in enhanced oil recovery projects (OGJ, May 5, 2014, p. 92).

“These projects are designed to help address the market’s growing demand for CO2 and enable companies, including Kinder Morgan, to increase incremental oil production by using CO2 in EOR projects,” said James Wuerth, president of KMEP’s CO2 group.

KMEP said investments are in addition to its recently announced initiative to invest $1 billion to develop the St. Johns source field in Apache County, Ariz., and build a 214-mile pipeline to transport CO2 from St. Johns to the Cortez Pipeline in Torrance County, NM (OGJ Online, Mar. 26, 2014).

Capital expenditures for the Cow Canyon development are estimated at $344 million and will increase CO2 production in the McElmo Dome source field by 200 MMcfd. The plan includes ongoing 3D seismic acquisition, 16 new wells, activation of one production well and one produced water disposal well, water separation facilities, one central compressor station, and associated gathering and produced water disposal pipelines.

Pending regulatory approvals, the company anticipates that 100 MMcfd of CO2 from the Cow Canyon development will come online by July 2015, with the remaining 100 MMcfd expected to be in service by yearend 2015.

Capital expenditures for the Cortez Pipeline expansion are estimated at $327 million and will increase the pipeline’s capacity from 1.35 billion bcfd to 2 bcfd by adding a 64-mile loop in New Mexico and three pump stations—one in Colorado and two in New Mexico—and modifying five existing pump stations—one in Colorado, three in New Mexico, and one in Texas.

This expansion will accommodate the increased CO2 supply from the McElmo Dome field, the recently announced St. Johns source field, and other sources in southwestern Colorado.

KMEP owns 50% interest in and operates the Cortez Pipeline. Pending regulatory approvals, the northern portion of the Cortez Pipeline expansion is expected to be completed by July 2015 to handle the additional volumes from Cow Canyon, while the southern portion is expected to be complete by mid-2016 to handle the additional 300 MMcfd of CO2 expected from the company’s St. Johns CO2 source field.

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