New supply will require pipeline capacity increase
Published on -7/31/2010, 5:39 PM
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By MIKE CORN
OGALLAH -- Massive changes are already in store for the natural gas pipeline that passes near here, waiting for a 115,000 volt transmission line that will power two 3,250-horsepower motors.
Announcements last week include a change in ownership, as Williams Partners has elected to exercise its option to increase its ownership in Overland Pass Pipeline Co. to 50 percent from 1 percent.
The bigger change, however, was the announcement that ONEOK Partners, would be building another massive pipeline from North Dakota, connecting it with the 760-mile Overland Pass pipeline.
That will mean a dramatic increase in the amount of liquid natural gas that will be flowing in the Overland Pass pipeline, which extends from southern Wyoming to Conway, where a massive underground storage system is located.
Tulsa, Okla.-Based ONEOK Partners last week announced that it would be spending anywhere from $450 million to $550 million to build a 525- to 615 mile pipeline from the Bakken Shale in North Dakota. That pipeline will meet up with the Overland Pass line in northern Colorado.
To do that, capacity of the Overland Pass line will have to be increased, possible by increasing the size of the booster stations. Two of those booster stations are located in Kansas, the one southwest of Ogallah and one south of McDonald in Rawlins County.
Massive transmission lines, capable of carrying 115,000 volts of electricity, are required to power the motors used to push along the liquid natural gas.
One substation is operating, but the one south of Ogallah is awaiting construction of the line. It is expected to become operational later this year.
The expansion of the Overland Pass pipeline capacity is expected to cost $35 million to $40 million.
Another $110 to $140 million will be spent to expand capacity of a plant near Bushton by 60,000 barrels per day to accommodate the additional natural gas. Currently, the plant can handle about 150,000 barrels per day; it was last expanded in June 2008.
In terms of the Williams option to expand its ownership, the move is procedural and stems from agreements reached prior to the pipeline's construction. ONEOK had owned 99 percent of the joint venture.
The Overland Pass pipeline runs through northwest Kansas, with massive pumping substations in Rawlins and Trego counties. The line also passes through southwest Ellis County.
The pipeline, which went into service in November 2008, can transport approximately 140,000 barrels per day with the ability to expand capacity to 255,000 barrels per day with additional pump facilities.
"With this transaction and our strong partnership with Williams, we do not expect this change in ownership to affect our continuing efforts to grow Overland Pass Pipeline and provide the services our customers expect from us," Terry K. Spencer, ONEOK Partners chief operating officer, said in a statement.









