Pumping gas into Odessa

The pipeline goes on for 62.5 miles. Those who have built it hope it will have an economic impact much longer than that.

A new 20-inch-diameter underground pipeline started transporting natural gas from the Yates formation in northwestern Andrews County. Neil Leibman, chairman of Houston-based Aspen Pipeline LP, said the gas is being used by two gas-fired Odessa power plants, Odessa Energy Power Partners and Navasota Energy's Quail Run Energy Center.

In the past, the gas has been considered unusable because of its high nitrogen content. But Leibman, whose company built and will own the $85 million pipeline, said it could be used for power generation.

"Nobody in the past has really created a market," he said. "I'm not only creating a market for it, but also providing transportation for the end user - the power plants."

Leibman said Tulsa, Okla.-based Arena Resources Inc. is the primary provider of gas for the pipeline, which started construction last September.

Arena controls 35,000 acres of natural gas in the Yates area. Will Porter, Arena's Permian Basin land manager, said that in the past, his company would have had to go through an expensive process of stripping the nitrogen from the gas before transporting it. But now it can be sent to power plants through the pipeline.

"They take the gas with nitrogen and mix it up with other types of gas," he said.

Initially, Arena is re-entering 90 previously drilled wells in the Yates formation. After that he said the company would enter more wells.

Porter said his company is already pumping 2.4 million cubic feet of Yates gas per day and expects that number to grow.

"It's just a perfect scenario," he said. "It provides the perfect avenue for us to produce that gas that's been out there for a long time and send it straight to the plants in Odessa."

Because the Yates gas can be sold cheaper, Leibman said it would make the Odessa plants more competitive with wind power. Aspen is also seeking additional companies to use to pipeline.

While the price of natural gas is low now because of an excess of the fuel, Leibman expects demand for the less expensive Yates gas to grow as the price rebounds.

The pipeline employed 280 workers at peak construction. Leibman said three people would work full time on the pipeline.

"It created short-term jobs and an economic benefit," he said.