June 2014, Vol. 241, No. 6

Projects

Kinder Morgan Set To Expand CO2 Footprint In Southwestern Colorado And New Mexico

Kinder Morgan Energy Partners, L.P. will invest $671 million to grow its CO-2 infrastructure in southwestern Colorado and New Mexico.

The company plans to expand its CO-2 production operations in the Cow Canyon area of the McElmo Dome source field in Montezuma County and expand the 500-mile Cortez Pipeline that transports CO-2 from southwestern Colorado to eastern New Mexico and West Texas for use in enhanced oil recovery (EOR) projects.

“These projects are designed to help address the market’s growing demand for CO-2 and enable companies, including Kinder Morgan, to increase incremental oil production by using CO-2 in EOR projects,” said James Wuerth, president of KMP’s CO-2 group. These investments are in addition to KMP’s recently announced initiative to invest $1 billion to develop the St. Johns source field in Apache County, AZ and build a 214-mile pipeline to transport CO-2 from St. Johns to the Cortez Pipeline in Torrance County, NM.
Capital expenditures for the Cow Canyon development are estimated at $344 million and will increase CO-2 production in the McElmo Dome source field by 200 MMcf/d. The company anticipates that 100 MMcf/d of CO-2 from the Cow Canyon development will come online by July 2015 with the remaining 100 MMcf/d in service by the end of 2015.
Capital expenditures for the Cortez Pipeline expansion are estimated at $327 million and will increase pipeline capacity from 1.35 Bcf/d to 2 Bcf/d by adding a 64-mile loop in New Mexico and three new pump stations, one in Colorado and two in New Mexico; and modifying five existing pump stations, one in Colorado, three in New Mexico, and one in Texas.

This expansion will accommodate the increased CO-2 supply from the McElmo Dome field, the recently announced St. Johns source field, and other sources in southwestern Colorado. Kinder Morgan owns a 50% interest in and operates the Cortez Pipeline. The northern portion of the Cortez Pipeline expansion is expected to be completed by July 2015 to handle the additional volumes from Cow Canyon while the southern portion is expected to be completed by mid-2016 to handle the additional 300 MMcf/d of CO-2 expected from the company’s St. Johns CO-2 source field.

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