Kinder Morgan Energy Partners and Sempra Pipelines & Storage have entered into a Memorandum of Understanding (MOU) to pursue development of a proposed new natural gas pipeline that would link producing areas in the
As designed, the 42-inch diameter pipeline would have capacity of up to two billion cubic feet per day and cost an estimated $3 billion. The preliminary route of the 1,500-mile pipeline would originate at the Wamsutter Hub in
“If built, the pipeline would maximise the value of growing Rockies production by creating unprecedented access by one pipeline to multiple markets and storage, while providing markets in the upper Midwest and Eastern U.S. with direct access to reliable, long-lived domestic natural gas supplies,” said Scott Parker, president of KMP’s Natural Gas Pipelines Group.
Under terms of the MOU, KMP and Sempra Pipelines & Storage will share responsibility for development activities. Additionally, Sempra has agreed to bid for 200 million cubic feet per day of firm capacity from the pipeline during an upcoming open season that it will use to serve distribution utilities on the East Coast. Initially, KMP would own two-thirds of the equity in the proposed pipeline and Sempra would own one-third.
Pending the feasibility of the project, customer commitments and regulatory approval, the proposed pipeline is projected to be staged into service beginning in the latter part of 2008 and continuing through to 2009.