CHEYENNE, Wyo. — Two pipeline companies have announced plans to construct an 800-mile pipeline that would transport natural gas from Wyoming to Canada and U.S. markets in the Midwest and Northeast.
Alliance Pipeline Inc. and Questar Overthrust Pipeline Company said the 42-inch Rockies Alliance Pipeline would start at Wamsutter in south-central Wyoming and traverse Wyoming, Montana and North Dakota en route to the Emerson trading hub on the Minnesota-Canada border.
The project, estimated to cost $3.5 billion, would interconnect with downstream lines to provide direct access to midwestern hubs and storage facilities, including the Chicago Hub, Michigan and Dawn storage, officials said.
The companies touted the project’s ability to connect the Rocky Mountain region — the nation’s fastest-growing natural gas producer — and hungry markets in the United States and central Canada.
“Rockies natural gas is an attractive alternative to Canadian gas and imported LNG,” Questar President and CEO Allan Bradley said in a statement Tuesday. “Alliance and Questar Pipeline are teaming up to offer our customers seamless natural gas transportation from multiple Rockies basins to growing natural gas markets in the East. This is a project whose time has come.”
Brian Jeffries, executive director of the Wyoming Pipeline Authority, welcomed the proposal as an important step in providing markets for the state’s natural gas. The pipeline would carry gas from the Wamsutter hub and the Powder River Basin.
The Rocky Mountain gas industry has been ramping up pipeline construction to maximize profits on the region’s plentiful supply.
Jeffries said the Rockies Alliance project is one five pending pipeline proposals in Wyoming. Four of those would carry gas westward to California. A sixth project, the Rockies Express, is under construction with plans to begin moving gas eastward by this summer.
“We support all infrastructure development to move Wyoming gas to better markets,” Jeffries said. “Over 50 percent of the state’s tax and royalty revenues are based on the value of natural gas.”
Alliance and Questar will start taking bids May 1 from customers who want to use the pipeline.
“The idea is that you need to get enough interested parties prepared to commit to capacity, to make the pipeline commercial and economic,” said Eric Besseling, director of business development for Alliance Pipeline.
The companies are targeting the fall of 2011 for opening the entire length of the pipeline, pending financing and regulatory approval. Besseling said the pipeline could be built in stages if customers are interested in connecting to certain lines along the Rockies Alliance route.
“Until we conduct the open season, we won’t know if parties will want to ship all the way to the terminus for the pipeline, or if they’ll want to connect to the crossing pipelines,” he said.
Besseling said the Western Canadian Sedimentary Basin is beginning to decline in natural gas production, and it’s possible the Rockies Alliance project would provide gas to supplement pipelines leaving the basin.
Wyoming Gov. Dave Freudenthal said the tables have turned from several years ago, when Canada was touted as an exporter of gas to the United States. Canada’s gas is now in high demand to fuel oil production in the oil sands of Alberta.
“And so a lot of the gas market that people thought that was going to be served by Canada, particularly the northern part of the United States and the eastern parts of Canada, is going to be served by the lower 48,” Freudenthal said.
Freudenthal said the pipeline proposal is another indicator of the importance that the private sector is placing on natural gas for the nation’s energy supply in the coming decade.
“And that the Rockies will be the sweet spot for natural gas production,” he said.
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