By the OGJ Online Staff
HOUSTON, Apr. 9�Questar Pipeline Co., Salt Lake City, said Monday it has secured a long-term gas-transportation contract for the entire initial capacity on the east zone of its Southern Trails Pipeline project.
The 705-mile pipeline from Blanco, NM, to Long Beach, Calif., is divided into east and west zones. The former has the capacity to transport 80,000 decatherms/day from multiple receipt points in the San Juan basin to the California state line.
Questar Pipeline purchased Southern Trails Pipeline in 1998 from ARCO Pipe Line Co. (now BP PLC). The line originally moved crude oil but Questar will convert it to move gas.
"This contract moves us one very large step closer to making the Southern Trails Pipeline a reality,'' said D.N. Rose, president and CEO, Questar Pipeline. "We now expect to be in a position to start construction in the near future.''
Questar also is seeking customers for Southern Trails' west zone, which runs from the California state line to the Long Beach area. That segment can move up to 120,000 dth/day, enough to generate electric power to meet the needs of about 1 million people.
But Questar said its efforts to place the west zone in service have been slowed by a Residual Load Service (RLS) penalty imposed by Southern California Gas Co., the dominant company in the region, which deters existing customers from using alternate gas suppliers in its service area.
Questar said options that Southern California Gas has proposed to in response to California Public Utilities Commission directives to eliminate the RLS would not improve the competitive gas-transportation environment in California.
"Southern California badly needs additional intrastate gas transportation capacity to supply proposed new electric power plants,'' Rose said. "We urge the regulatory authorities in California to act promptly to remove the barriers that are delaying our project.''
Questar Pipeline is a wholly owned subsidiary of Questar Corp., an integrated energy resources and services company with $2.5 billion in assets.