By the OGJ Online Staff
HOUSTON, Feb. 18 -- Kinder Morgan Energy Partners LP and San Jose, Calif.-based independent power producer Calpine Corp. have pulled the plug on plans to jointly develop a 1,160 mile, $1.7 billion natural gas pipeline that would have transported gas to California from the San Juan basin in New Mexico. The pipeline project -- to have been called Sonoran Pipeline -- was announced last year (OGJ Online, May 2, 2001).
"The Sonoran Pipeline was unable to secure sufficient binding commitments to make a successful project given market conditions," the companies said.
Before the development of the line could begin, executives from both companies stipulated the need for firm transportation agreements, and the partners had received more than 1 bcfd of binding precedent agreements for the pipeline project's first phase during an open season that closed on June 1, 2001 (OGJ Online, June 7, 2001).
The first phase of the line would have extended from he Blanco Hub and terminated near Needles and Topock, Calif., with a possible second phase planned for gas deliveries into northern California.
Neither Calpine nor Houston-based Kinder Morgan had spent "significant" capital on the proposed project, which was slated to come on line in 2004. Both companies said they would continue to "evaluate other opportunities to serve the growing California market," they said.