More than 400 construction workers recently put finishing touches on a gleaming new natural gas processing plant in Rio Blanco County scheduled to go online in summer.
Its price tag: $350 million.
Farther south in Garfield County, scores of men in hard hats laid a $50 million pipeline project designed to carry gas out of Colorado to energy-hungry markets in the Midwest and East Coast.
Nearby in Parachute, a crew of engineers, mechanics and electricians hauled high-voltage power lines to a gas processing plant to increase its capacity by more than 30 percent.
The sprawling plant, snaking pipelines and massive power lines all belong to Williams Co., one of Colorado’s largest gas producers. The Oklahoma-based company is going full steam with capital projects worth hundreds of millions of dollars despite sinking energy prices.
No doubt Williams is feeling the pinch of this recession like other energy companies. It’s slashing its 2009 drilling budget to $600 million and rig count to 10, down from 2008’s $1.2 billion budget and 25 rigs.
But the drawdown hardly means Williams is bracing for a bust, said spokeswoman Susan Alvillar. On the contrary, the company is utilizing this slowdown to build capital projects and lay foundation for a robust drilling program once the economy and energy prices firm up.
“For the future, we have between 6,000 and 9,000 new wells on our radar screen we would like to drill,” Alvillar said. “It is imperative to have the infrastructure in place so we can move forward with that ultimate business plan, although who knows how soon that can happen.”
Williams intends to drill 300 new wells this year, using the rigs efficiently to save time and money. In 2008, it used 25 rigs to drill 600 wells.
All told, Williams expects to have more than 3,000 wells in Colorado, nearly 10 percent of the state’s total, by the end of the year. Tens of thousands more wells are on the drawing board. Forecasts show the Colorado gas field boom extending 20, even 30 years into the future.
It’s just that it has slowed down now.
Denver-based Antero Resources plans to spend $20 million on improving gas gathering and produced-water lines, and enhancing production from its 150 existing gas wells near Rifle and Parachute, although it won’t drill any new wells this year.
“We will continue to work on infrastructure to position ourselves when prices rebound,” said Antero Chairman and CEO Paul Rady.
Garfield County’s oil and gas liaison, Judy Jordan, said that if companies are “still investing in infrastructure, they’re anticipating they’re going to recover.”
Gargi Chakrabarty: 303-954-2976 or gchakrabarty@denverpost.com
