Natural Gas

El Paso Corp. reports that the California Public Utilities Commission has unanimously given final approval to Pacific Gas and Electric Co. to proceed with an agreement announced last year to obtain 375,000 dekatherms per day of capacity on the Ruby Pipeline for the delivery of natural gas to PG&E’s gas and electric customer.

CPUC’s approval of this “anchor” shipping agreement paves the way for El Paso to move forward with the approximately 680-mile interstate natural gas pipeline that will extend from the Opal Hub in Wyoming to a pipeline interconnect at Malin, Oregon, near California’s northern border.

“We are very pleased with this decision by the California Public Utilities Commission,” says Jim Cleary, president of El Paso’s Western Pipelines. “This was an important milestone in keeping Ruby Pipeline on schedule to provide a much needed outlet for an increasing amount of Rocky Mountain natural gas production as well as improved supply diversity for the Western United States. With this approval, Ruby remains on schedule for a planned first quarter of 2011 in-service date.”

In granting its approval, the CPUC agreed that Ruby will serve the public interest by enhancing competition, increasing reliability, and promoting gas supply diversity. In addition, the CPUC decision cited lower gas commodity and transportation costs, a reduction in environmental impacts, and favorable rates for consumers. Next, Ruby will file with the Federal Energy Regulatory Commission in January 2009 for necessary federal approvals.

Stay tuned. More to come. The race is on to open as much capacity as possible to get natural gas from the producing fields to the necessary markets.

–John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, jsullivan@hartenergy.com

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