Rockies gas pipeline delivers cheap gas

HOUSTON, July 9 (UPI) -- A natural gas pipeline from the Rocky Mountains in Colorado lessens U.S. dependence on Canadian gas by as much as 10 percent, analysts say.

A new section of the 1,679-mile Rockies Express natural gas pipeline, REX, is contributing to the delivery of some 1.5 billion cubic feet of gas per day to markets in the U.S. Midwest, a report by Keith Schaefer on oilandgas-investments.com stated.

Jack Weixel, a director at the Bentek Energy analytical company, told Schaefer that REX will displace about 600 million cubic feet of natural gas coming from Canadian production efforts. He notes that Colorado gas is a much cheaper option for U.S. markets.

The analyst told Schaefer the Rockies region lacked transit routes to deliver its cheap gas, but the new REX section is feeding more markets in the United States, making domestic markets less dependent on Canada.

Weixel added market conditions in the United States versus Canada, where the gas market is less competitive, means lower operating costs for REX. Canada, for its part, will see more gas entering its storage systems, which translates into its own cost benefits, the report on oilandgasinvestments.com said.