TransCanada enters Rockies gas contest

It shapes up as Rockies I as TransCanada and Kinder Morgan go toe-to-toe for natural gas shippers from the burgeoning U.S. Rockies market.

TransCanada invited bids April 7 for its proposed Pathfinder system from Wyoming through Montana and North Dakota to connect with its Northern Border system from Alberta to the Ventura and Chicago area markets.

Kinder Morgan is already moving 1.5 billion cubic feet per day from Colorado to Ohio on its Rockies Express line, while TransCanada in March announced the proposed Sunstone pipeline from the Rockies to Oregon.

They’re all scrambling to corner a slice of the only U.S. onshore region to record year-over-year gas production gains in the past decade as it closes in on 16 bcf per day by 2010, at which point it will pass Western Canada.

TransCanada Chief Executive Officer Hal Kvisle said Pathfinder offers access to the Midwest market and possibly to eastern customers.

Initial capacity on the 500-mile system of 1.2 bcf per day on a 42-inch diameter line, starting in 2010, could grow to 2 bcf per day and be extended by 270 miles.

The open season closes May 22 when TransCanada will decide whether to proceed with regulatory applications. Until then it is not able to estimate project costs, although Kinder Morgan spent US$4.9 billion on its 1,600-mile, 42-inch Rockies Express joint venture with Sempra Pipelines and ConocoPhillips.

When extended from Missouri to Ohio, Rockies Express volumes are expected to rise to 1.6 bcf per day in January 2009 and 1.8 bcf per day by mid-2009.

—Gary Park