Rockies Pipeline to Go East
San Diego-based Sempra Energy and Houston-based Kinder Morgan Energy Partners plan a $3-billion natural gas pipeline linking the Rocky Mountains, a region forecast to become the largest U.S. source of fuel output, to the Midwest and East.
The pipeline would carry as much as 2 billion cubic feet of gas a day from Wyoming to Ohio beginning in 2008, the companies said Wednesday. Kinder Morgan would own two-thirds of the project; Sempra, parent of Southern California Gas Co., would have a 33% stake.
The line may help producers get higher prices for their gas, Kinder Morgan and Sempra said. The Rockies will have a 37% gain in gas output in the next decade and will surpass the Gulf of Mexico as the largest producing region in the U.S., according to the Energy Department.
“They’ve had tremendous success increasing production out there but little success in increasing shipping capacity,” said Arthur Gelber, an energy-trading consultant in Houston.
Gas at the Opal, Wyo., delivery point sold Wednesday for $7.86 per million British thermal units, about $2 below the price for gas futures traded in New York.
Shares of Kinder Morgan Energy, a limited partnership, fell 79 cents to $49.79. Shares of Kinder Morgan Inc., which manages the business, dropped 96 cents to $91.57. And Sempra rose 53 cents to $42.52.