CHEYENNE, Wyo. - The federal government has agreed to ship natural gas it owns through a pipeline being built to carry Wyoming and Colorado gas to markets in the Midwest and East.
The Interior Department's Minerals Management Service signed a 10-year agreement to ship more than 18 billion cubic feet of gas per year through the Rockies Express Pipeline. The agreement must be approved by the Federal Energy Regulatory Commission.
The 1,323-mile pipeline is being constructed by Kinder Morgan Energy Partners and Sempra Energy. It will extend to eastern Ohio, where it can connect with other pipelines serving the eastern United States.
The pipeline is expected to be completed by 2009.
Some natural gas operators pay mineral royalty payments they owe to the federal government with natural gas rather than cash, a process called payment in kind, according to Patrick Etchart, a spokesman for the Minerals Management Service.
The agency then sells the gas on the open market.
"With this pipeline commitment, MMS will be able to expand its Royalty-in-Kind program in Wyoming," agency director Johnnie Burton said in a statement Monday, noting that the arrangement will allow the agency more flexibility to move gas to markets where demand is highest.
ON THE NET
Minerals Management Service: http://www.mms.gov
To subscribe or visit go to: http://www.ohio.com/