Firms Get Boost in Gas Pipeline Race to State
The race to build a natural gas pipeline to California heated up Friday when Southern California Gas Co. announced an agreement to buy gas from the Altamont pipeline project, which would bring gas from Canada to Wyoming.
At the same time, the Kern River Gas Transmission Co., which is proposing its own pipeline from Wyoming to California, said it had agreed to transport Altamont’s gas on the final leg of its journey south.
The agreements gave a boost to Altamont and Kern in their competition with a rival pipeline project of Pacific Gas & Electric Co. of San Francisco, which also proposes to transport the cheap Canadian gas desired by many local customers.
Kern’s agreement with Altamont also is an apparent setback for the competing Wy-Cal Pipeline project, which would follow a route nearly identical to Kern’s.
All of the projects are competing with several others for federal permission, customers and financing to begin construction and ultimately win a share of the expected strong market for natural gas here.
Altamont also announced Friday that it had applied for federal permission to proceed with the project.
“I wasn’t sure whether (Altamont) could be a viable project,” said Richard Bilas, a member of the California Energy Commission. “It certainly revives interest in Altamont project and shows that someone else is thinking about bringing in Canadian gas other than through the (PG&E;) system.”
Southern California Gas said it would contract for 200 million cubic feet per day of Canadian gas through the Altamont line, a $580-million, 620-mile pipe from Wild Horse, Alberta, Canada, to Opal, Wyo.
At Opal, Altamont would connect with the proposed Kern River pipeline, a 762-mile $750-million line that would bring the gas to California and gas company pipelines.
The agreements followed by a month separate deals between Kern River and the Mojave Pipeline Co. to merge their pipelines at Barstow. SoCal Gas has previously contracted with Kern River for 150 million cubic feet per day of natural gas.
The combined projects would afford Southern California Gas access to natural gas from Canada, Wyoming, Kern County and the Southwest, said gas company Senior Vice President Frederick E. John.
Altamont is sponsored by Petro-Canada Inc., Amoco Canada Petroleum Co. Ltd. and Shell Canada Ltd. Kern River is a joint venture of units of Tenneco Inc. of Houston and the Williams Cos. of Tulsa, Okla.