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Friday, March 18, 2016

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

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