California PUC Approves Plans To Bring Rockies Gas To California

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The California Public Utilities Commission approved plans by PG&E Corp.’s Pacific Gas & Electric unit to bring Rockies natural gas to California on the $3 billion Ruby Pipeline planned by El Paso Corp.

The 670-mile, 42-inch-diameter Ruby pipeline will run from the Opal hub in Wyoming to the Malin, OR hub near the California-Oregon border. The Ruby line would connect with the PG&E natural gas pipeline system at Malin.
The 15-year agreement calls for PG&E as anchor shipper to get 375 MMcf/d of Ruby’s capacity to deliver 1.3-1.5 Bcf/d at Malin. The commission also let the utility recover its costs from retail customers to ship gas on Ruby as well as its Redwood Path line. El Paso spokesman Bruce Connery said Ruby’s construction is not expected to be affected by the credit crunch because construction is to begin until 2010. “Ultimately, the natural gas pipelines, because they have long-term commitments from shippers, tend to be very attractive from the financing standpoint,” Connery said.

The California PUC dismissed an alternate proposal for PG&E to get supply from another proposed project, the Sunstone Pipeline backed by Williams Companies and TransCanada and its Gas Transmission Northwest Corp (GTN). Sunstone would be 230 miles longer than Ruby and would also bring gas from the Opal hub in Wyoming.