Williams Moves Forward with Rocky Mountain Natural Gas Pipeline Projects as Region Gears Up for 5 BCF Expansion

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Researched by Industrial Info Resources (Sugar Land, Texas). Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma) has advanced its Parachute Lateral Project to the FERC permitting stage and expects to receive FERC approvals for the new pipeline project by July of 2006. The Parachute Lateral Project is a natural gas pipeline lateral designed to transport gas from the Parachute Gas plant located near Parachute Colorado to an interconnection point with the Williams owned and operated Northwest Pipeline system in the vicinity of the Greasewood Hub.

Williams estimates that the pipeline will cost approximately $62 million to construct. The 38 mile 30” diameter pipeline will have an initial capacity to transport up to 575 million cubic feet per day of natural gas. The new pipeline lateral project will not involve compression facilities and will free flow the gas the Greasewood area.

Williams expects to select contractors for the construction phase of the lateral pipeline some time in the late second quarter of 2006. Construction is expected to begin in August of 2006, with a completion and in-service date scheduled for the forth quarter of 2006. Williams is also at the present time examining the possibility of constructing a second lateral in Colorado consisting of 33 miles of 30” diameter pipeline. That second project is still in an economic evaluation process. If the second pipeline goes in to the construction phase an additional 500 million cubic feet per day of natural gas capacity would interconnect with the Northwest Pipeline system.

From a macro view, both pipelines represent a growing number of minor and major pipeline project schemes that are designed to facilitate the export of natural gas from the Rocky Mountains to markets in the Midwest and Pacific Coasts. Forecasts are calling for an additional 5 billion cubic feet per day of production to come online in the Rocky Mountains region over the next several years. In turn several pipeline projects need to be developed to tie this additional production to existing pipeline systems and in some cases entire new pipeline mainlines are being proposed to export this new production capacity to points as far as eastern Ohio destined for markets in the Northeast.

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