New storage facilities to help Rockies gas bottleneck fully subscribed

Kinder Morgan Energy Partners LP declared a successful open season for a new natural gas storage project designed to help ease the supply infrastructure bottleneck for Rocky Mountain region gas.

By OGJ editors

HOUSTON, JULY 2 -- Kinder Morgan Energy Partners LP declared a successful open season for a new natural gas storage project designed to help ease the supply infrastructure bottleneck for Rocky Mountain region gas.

KMEP's Kinder Morgan Interstate Gas Transmission LLC unit reported that the added 6 bcf of gas storage capacity to be created by its Cheyenne Market Center service was fully subscribed under 10-year contracts under a 2-week open season that ended last month. Bids totaled more than 26 bcf.

Pending approval by the Federal Energy Regulatory Commission, KMIGT will construct pipeline, compression, and storage facilities to provide the new service at a capital cost of $30 million.

The new service offers firm storage capabilities that will allow for the receipt, storage, and subsequent redelivery of natural gas supplies at applicable CMC points located near the Cheyenne Hub in Weld County, Colo., and KMIGT's Huntsman facility in Cheyenne County, Neb.

The additional infrastructure will have injection capability of 38.4 MMcfd and withdrawal deliverability of about 62.4 MMcfd. CMC, which is expected to be in service during the summer of 2004, will not affect existing KMIGT transportation or storage services, KMEP said.

Increased coalbed methane production and transportation infrastructure bottlenecks have been depressing markets for Rocky Mountain gas (OGJ, July 1, 2002, p. 7).

Richard D. Kinder, chairman and CEO of KMEP parent and Houston-based Kinder Morgan Inc., noted, "Rapidly growing natural gas supplies in Wyoming and ongoing pipeline expansions have led to increased need for services at the Cheyenne Hub. The new CMC service will provide shippers with storage options to help them better manage their natural gas volumes and address market opportunities."

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