Future Role Of Natural Gas And Shale Revolution Dominate At P&GJ’s 2010 Pipeline Opportunities Conference

P&GJ’s 2010 Pipeline Opportunities Conference
By Rita Tubb, Managing Editor | June 2010 Vol. 65 No. 6

In describing where Ruby stands today, Price said El Paso has 1.1 Bcf of firm transportation commitments which is about 65% supported by the producing community in the Rocky Mountains and about 35% by PG&E. The project carries an estimated price tag of $3 billion. El Paso expects construction to commence this spring and believes they are on scheduled to achieve their targeted in-service date of March 1, 2011.
A presentation by Jim Lelio, Director, Business Development for Kinder Morgan, focused on moving commercial volumes of ethanol and biodiesel via pipeline and drew considerable interest. In December 2008, Kinder Morgan became the first company to transport ethanol through a pipeline for commercial use.

“We are moving batches of denatured ethanol along with gasoline shipments through our 85-mile Central Florida Pipeline from Tampa to Orlando and we’re the only pipeline in the U.S. doing it,” he said.
Lelio said the pipeline transporting ethanol was not a dedicated line. “Ethanol is batched in between batches of gasoline every week. With our recent optimization of tankage in 2009 we can now handle 100% of the Orlando ethanol market by pipeline.”

Product quality, pipe cleanliness and dewatering are all key challenges that Kinder Morgan had to overcome, he explained.

Moving on to the company’s biodiesel pipeline, Lelio said Kinder Morgan began moving blended biodiesel (B5) last summer on a mainline segment of the Plantation Pipeline from marketing terminals located in Athens, GA and Roanoke, VA. He said the company is shipping 10,000 Bpd of B5 blend and is working to expand that to 100,000 bpd, ultimately to 200,000 bpd.

Tony Straquadine, Government Affairs Manager for Alliance Pipeline, discussed the potential role of the 2,400-mile Alliance Pipeline in future shale plays due to its unique position. “On the northern end, our gathering system goes right through the Montney Shale in British Columbia which is estimated to hold 50 Tcf of recoverable gas reserves.”

As a result, the company held an open season last year to attract shippers to bring supply into the Alliance system. Straquadine said the Bakken Shale offers opportunities as well, particularly since the construction of the 76-mile Prairie Rose Line that connects into the Alliance system.

“This is the first U.S. interconnect onto the Alliance system,” he said. “We’re attracting Bakken and Montney producers and expect as the Horn Shale in British Columbia develops, Alliance will likely see some of that gas coming down our system. Certainly another goal is to see how best to serve the Chicago market going forward.”