Work starts on Rockies pipeline conversion

KN's Proposed Crude Oil-To-Gas Pipeline Conversion [42938 bytes]

KN Energy Inc., Lakewood, Colo., has begun laying an oil pipeline in Wyoming as part of a $155 million pipeline conversion project to create an interstate corridor for Rocky Mountain gas.

The Pony Express gas pipeline will be able to transport as much as 255 MMcfd of gas to markets in the U.S. Midcontinent, Midwest, and East regions, by way of interconnects in Kansas and Missouri with longhaul interstate pipeline systems.

Rocky Mountain region gas will travel as far as 850 miles on the 20 in. Pony Express mainline, from as far west as Wyoming's Wind River basin across Colorado, Nebraska, and Kansas to as far east as the system's terminus at Freeman, Mo.

In addition, KN plans to lay a 16 in. lateral 65 miles from northwestern Weld County, Colo., to an interconnect in Kimball County, Neb., with the Pony Express mainline. The so-called Rockport lateral will enable Pony Express to receive gas from the Piceance-Uinta and Denver-Julesburg basin areas through interconnects with Williams Natural Gas Co., Colorado Interstate Gas Co., Wyoming Interstate Gas Co., and Public Service Co. of Colorado.

Pony Express also will interconnect at several points in Wyoming, Colorado, Nebraska, and Kansas with KN's existing gas pipeline system.

In all, Pony Express will have access to more than 6 tcf of gas reserves in Rocky Mountain basins, as well as supplies from southeastern Colorado, southwestern Kansas, and the Oklahoma and Texas panhandles.

Better shipping flexibility

The Pony Express interconnects in Kansas and Missouri will enable gas producers, marketers, and other shippers more flexibility to serve more diverse markets.

The line will interconnect with Panhandle Eastern Pipeline Co., Williams Natural Gas in two locations, ANR Pipeline Co., Western Transmission Co., Northern Natural Gas Co., and Natural Gas Pipeline Co. of America.

Core to KN's Pony Express pipeline plan is conversion of an Amoco Pipeline Co. crude pipeline running from Riverton, Wyo., to Freeman.

KN early this month began laying 114 miles of 12 in. crude oil pipeline between Casper, Wyo., and Fort Laramie, Wyo. KN agreed to construct the crude line to enable Amoco to continue shipping oil between the two points.

KN also was purging the rest of the former Amoco line of crude and conducting hydrostatic testing of the pipeline for gas service.

"We will not be able to begin modifications to place the pipeline in gas service until we receive Federal Energy Regulatory Commission approval," a KN official said.

KN expects next month to receive FERC approval to proceed with the conversion and place Pony Express line in service in early 1997.

The company expects initial gas free flow on the system to total about 60 MMcfd. The system's full capacity of 255 MMcfd is to become available by August 1997.

KN first committed to buy the Amoco crude line in a Jan. 30, 1996, agreement. The company in early August sold 3.2 million shares of common stock and $125 million of debentures to fund construction and conversion activities required to create Pony Express.

KN officials estimate total cost of the conversion project at about half the cost of a new-build gas transportation system that would accomplish the same goals.