Kern River Gas Transmission Co. has received key regulatory approval of its contracts with natural gas shippers, who have made final commitments to ship enough gas to underwrite construction of its Wyoming-California pipeline.
As a result, Kern River directed steel mills to begin making plate and rolling pipe under previously negotiated contracts. Pipe deliveries will begin in December to coincide with start of construction.
Oregon Steel Mills Inc., Portland, Ore., said its wholly owned Napa Pipe Corp. received the go ahead to start production of 251,000 tons of 36 in. pipe for Kern River, a partnership of Williams Cos. Inc. and Tenneco Inc.
Napa also received a green light to start production of 38,000 tons of 30 in. pipe for Mojave Pipeline Operating Co., a joint venture of Enron Corp. and El Paso Natural Gas Co.
Shipments to the pipeline construction site in southern California will begin in first quarter 1991.
APPROVAL, CONSTRUCTION
The Federal Energy Regulatory Commission approved Kern River's contracts with shippers. Kern River last week disclosed final reconfirmation of shipper volumes in excess of the 400 MMcfd required to underwrite the project.
Contractual commitments with shippers on the remaining firm volumes of the 700 MMcfd initial capacity of the system are expected to be completed shortly.
Bids for construction support the project's economics, Kern River said. Construction contracts for the first two spreads, one in southern Utah and the other in Nevada, will be let this month.
Construction of the northern half of the system will occur in the summer and fall of next year.
Gas is expected to flow Jan. 1, 1992.
The 904 mile pipeline will transport gas to be used mainly as fuel in thermal enhanced oil recovery operations in the heavy oil fields of Kern County, Calif.
Kern River's gas also will be distributed by utilities, used for production of electricity, cogeneration of electricity and steam, and other industrial applications.
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