El Paso gets partner for Ruby project

El Paso Corp. says that it has executed a binding agreement with Global Infrastructure Partners (GIP) whereby GIP will acquire a 50% interest in the Ruby Pipeline project. Under the terms of the agreement, GIP will invest up to $700 million in the project, which represents a 50% equity interest.

El Paso will be responsible for the construction of the Ruby Pipeline project and its operations. The Ruby Pipeline is on schedule and is expected to be completed at or below its $3-billion budget. Should construction costs come in under budget, El Paso will retain all benefits. Conversely, El Paso will absorb any cost overruns.

The Ruby Pipeline project calls for a 675-mi, 42-in. interstate natural gas pipeline that will access growing sources of supply from multiple Rockies basins and make those supplies available to California, Nevada and the Pacific Northwest region. Ruby has filed with the FERC to have an initial design capacity of up to 1.5 billion cubic feet per day.

In January, El Paso filed an application with the FERC for a certificate of public convenience and necessity, under Section 7(c) of the Natural Gas Act, to construct and operate the Ruby Pipeline.

In June, FERC issued a Draft Environmental Impact Statement (DEIS) which was consistent with Ruby’s construction plan and schedule. Ruby anticipates timely issuance of FERC’s Final Environmental Impact Statement in October.

Assuming FERC approval in the first quarter of 2010, construction would begin in the second quarter of 2010 with the pipeline completed in time for a March 2011 in-service date.