Kern River Gas Transmission Co. has signed firm transportation contracts covering 150 MMcfd of Canadian gas, pushing its total above the minimum volume required to finance its proposed Wyoming to California pipeline.
California Public Utilities Commission (CPUC) earlier this month issued a decision laying down conditions for construction of out of state pipelines to move as much as 2.1 bcfd of gas into California. It chose to let market forces determine which of the competing pipeline projects gets built (OGJ, Feb. 12, Newsletter).
Kern River, a planned 36 in., 904 mile line beginning in Opal, Wyo., with initial capacity of 700 MMcfd, will link California with Rocky Mountain and Canadian gas supplies.
A joint venture of Williams Cos. Inc. and Tenneco Inc., the Kern River line is scheduled to start up in fourth quarter 1991.
ECONOMICS ASSURED
The latest contracts boost the project's firm, long term contracted volumes to 520 MMcfd, more than the volume needed to arrange financing to build the line.
Kern River signed for 120 MMcfd for 15 years with Petro-Canada Inc. and with Salmon Resources, a U.S. unit of Shell Canada Ltd., for 30 MMcfd.
The gas will move via Northwest Pipeline Corp.'s existing system from Huntington, B.C., to Opal. Northwest is a unit of Williams Cos.
Petro-Canada will transport the gas from British Columbia through existing arrangements on the Northwest line.
Petro-Canada is continuing marketing activities in Nevada and California and will apply for Canadian and U.S. regulatory approvals as soon as it completes sales arrangements.
The company also is a partner in the Altamont project, a Canadian pipeline proposed to link up with Kern River at Opal.
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