T-REX -- Background And Update -- March 18, 2016

Finally, time to get serious, time to learn about the Rockies Express Pipeline.

First, some data points from wiki:

• 1,679 miles long
• wiki calls it a pipeline from the Rocky Mountains of Colorado to eastern Ohio (in fact, better to say the other way around, as we will see later)
• three sections
• one of the largest gas pipelines ever built in North America
• diameter varies between 36 and 42 inches; primarily 42 inches
• initial cost: $5 billion
• compare with Trans-Alaska Pipeline: 800 miles, 48-inch diameter, Prudhoe Bay to Valdez; cost: $8 billion, plus $1 billion to Native Americans plus 150 million acres federal land (according to wiki, 300,000 people in Alaska in 1970; about 15% native American = 45,000 to divide up $1 billion, about $20,000 apiece (my calculations; I often make simple arithmetic errors)

REX - Entrega (Zone 1)

• 328 miles
• within the state of Colorado

REX - West (Zone 2)

• 713 miles
• Colorado to Missouri

REX - East (Zone 3)

• 638 miles
• Missouri to Clarington, Monroe County, Ohio
• Final (current) upgrade: REX has filed with FERC for a 0.8 billion cubic feet per day expansion of Zone 3 east-to-west
• this upgrade is anticipated to be completed in 4Q16

Operators:

• Rockies Express Pipeline, LLC, a partnership between:
• Tallgrass Energy Partners
• Phillips 66
• Sempra Energy
• Kinder Morgan Energy Partners and Sempra Energy acquired Entrega Gas Pipeline from EnCana, 2006
• COP acquired 24% of the project in 2016

Now from RBN Energy, an update:

• Zone 3 Capacity Enhancement expansion project (Z3CE): final approval to begin construction received last week (mid-March, 2016); to add 0.8 Bcf/d
• will expand east-to-west capacity out of the Marcellus/Utica to a record 2.6 Bcf/d
• East-to-West Expansion (E2W), came online last August (2015)
• in one fell swoop, the E2W gave the Northeast producers their first substantial westbound capacity, totaling a full 1.8 Bcf/d
• this will be the first winter (2016 - 2017) with nearly a full winter's worth of pipeline flow data
• since last August (2015), westbound flows on REX have filled to capacity (1.8 Bcf/d)
• winter-over-winter, we now know that westbound movements in Zone 3 have more than doubled, averaging about 1.7 Bcf/d this winter (2015/2016) to date, compared to about 0.6Bcf/d in the same period last winter
• points along the way, especially Chicago Citygate are target demand markets