Southern Star pipeline plans expansion to meet growing natural gas demand in Missouri, Kansas

Southern Star Central Gas Pipeline is seeking US Federal Energy Regulatory Commission authorization to boost capacity, through compression, to meet rising natural gas demand in Missouri and Kansas.

FERC posted a notice of the application Dec. 3, and set a Dec. 24 deadline for interventions (CP25-19).

The Cedar Vale Compressor Station Project involves building a new 6,091-horsepower compressor station in Osage County, Oklahoma, FERC said. It would add about 98,000 Dt/d of firm capacity in Southern Star's market delivery area, and about 35,000 Dt/d in incremental firm capacity in its production area.

Southern Star said, in its Nov. 18 application, that the extra capacity "will assist shippers in moving gas to the growing markets in and around Springfield, Joplin, Kansas City, and Topeka in Missouri and Kansas." The shippers are "all either natural gas utilities or electric utilities [that use] natural gas for power generation," the company said.

Coal retirements have been a key driver of power sector demand in the region, Matt McCoy, director of commercial services, said Dec. 6. The Midwest is "heavily reliant" on coal, but "a lot of of the coal fleet is approaching end-of-life." Natural gas plants are replacing these aging coal plants, because gas is "much more efficient," McCoy said. "It doesn't make a ton of sense to go to clean coal or to retrofit existing units."

The extra production capacity will be on its Straight Blackwell line, which runs from Texas County, Oklahoma, to the Blackwell Compressor Station in Kay County, Oklahoma.

Supply will come primarily from SCOOP/STACK, Woodford Shale, and the Permian Basin, the company said. "We're not physically attached to the Permian, but we see Permian molecules through other pipelines," McCoy said. "There are a series of discussion around how do you get more gas out of the Permian Basin into the Midcontinent."

After a binding open season, Southern Star has executed precedent agreements with shippers for about 88,000 Dt/d of incremental capacity in the Market Area and about 20,000 Dt/d of incremental capacity in the production Area. It is having open seasons for the remaining available capacity, it told FERC. That open season is scheduled to run to Jan. 31.

Price spikes

Southern Star said it was pursuing the pipeline "in response to the requests and concerns of its shippers due in large part to recent winter storms." The Platts Southern Star Texas-Oklahoma-Kansas spot price spiked significantly during each of these storms.

It reached almost $29/MMBtu for Jan. 13-16 flows during the most recent winter storm. In 2022, the price spiked to nearly $30/MMBtu for Dec. 22 flows. Spikes were on another level during the 2021 winter storm, when the cash price hit almost $330/MMBtu for Feb. 13-16, and then $623/MMBtu Feb. 17.

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