Rockies Express Pipeline LLC applied March 30 at the Federal Energy Regulatory Commission for a certificate of public convenience and necessity authorizing the construction and operation of certain mainline compression and ancillary facilities that will enable it to offer an additional 800,000 Dth/d of east-to-west firm transportation service within Zone 3 of its system.
The project is referred to as the “REX Zone 3 Capacity Enhancement Project.” The proposed facilities will increase the Rockies Express Zone 3 east-to-west mainline capacity by 800,000 Dth/d from receipts at Clarington, Ohio, to corresponding deliveries of 520,000 Dth/d and 280,000 Dth/d to Lebanon, Ohio, and Moultrie County, Illinois, respectively. The proposed facilities will allow the pipeline to meet demand for east-to-west transportation of gas from the Appalachian Basin to Midwestern gas interconnects and markets, while continuing to meet all of its existing firm service obligations for both eastbound and westbound firm transportation.
Rockies Express’s proposal includes: the construction of three new mainline compressor stations located in Pickaway and Fayette counties, Ohio, and Decatur County, Indiana; the installation of additional compressor units at one existing compressor station located in Muskingum County, Ohio; and the construction of ancillary facilities.
Rockies Express is owned by three members: 50% by Rockies Express Holdings LLC, an indirect wholly-owned subsidiary of Tallgrass Development LP; 25% by P&S Project I LLC, a subsidiary of Sempra Energy; and 25% by COPREX LLC, a subsidiary of Phillips 66.
Recently, the commission approved certain system modifications necessary to enable Rockies Express to provide an additional 1,200,000 Dth/d of firm transportation service from east-to-west within Zone 3, while continuing to satisfy existing firm wes-tto-east transportation commitments (called the “Zone 3 East-to-West Project”).
“When complete, the Zone 3 East-to-West Project will transform Zone 3 of Rockies Express into a fully bidirectional system capable of effectuating forward haul deliveries in an eastward and westward direction within Zone 3,” said the application. “Rockies Express anticipates that the Zone 3 East-to-West Project will be complete within the second quarter of 2015.”
Said the application about this latest project: “The U.S. has experienced substantial growth in gas production in the Appalachian Basin, including from the Marcellus and Utica shale formations in Ohio, West Virginia, and Pennsylvania. As a consequence, natural gas market participants are seeking an economical and near-term transportation solution to move these new supplies to Midwestern markets, which include retail consumers, commercial users, and new gasfired power generation that is anticipated to replace certain coal plants. Based on the location of its mainline and existing Midwest delivery points, Rockies Express is uniquely positioned to provide Midwest gas consuming markets greater access to the burgeoning Appalachian production while continuing to provide an outlet for Rocky Mountain production.”
Rockies Express initially conducted a non-binding open season in the May-June 2014 period to assess market interest in transporting gas quantities in an east-to-west (westbound) direction within Zone 3. Thereafter, Rockies Express held a binding open season from March 2 of this year to March 13 to solicit interest in the firm transportation of gas on the project beginning in the third or fourth quarter of 2016. Ultimately, Rockies Express secured long-term binding commitments (“Precedent Agreements”) with six shippers for a total firm transportation commitment of 700,000 Dth/d. They are:
- American Energy–Utica LLC, 15 years, 150,000 Dth/d;
- EdgeMarc Energy Holdings LLC, 15 years, 50,000 Dth/d;
- EQT Energy LLC, 15 years, 200,000 Dth/d;
- Gulfport Energy Corp., 15 years, 50,000 Dth/d;
- Jay-Bee Oil & Gas Inc., 15 years, 150,000 Dth/d; and
- Triad Hunter LLC, 15 years, 100,000 Dth/d.
This proposed east-to-west Zone 3 capacity is in addition to the currently contracted 600,000 Dth/d of east-to-west firm transportation received on the Rockies Express mainline from the Seneca Lateral and—upon completion—the additional 1,200,000 Dth/d of east-to-west capacity generated by the Zone 3 East-to-West Project. This incremental westbound flow will complement the historic eastbound flow on the mainline with no adverse effect to any existing eastbound or westbound shippers’ firm transportation service, the application said.