XML 80 R24.htm IDEA: XBRL DOCUMENT v2.4.0.8
Strategic Review of Questar Southern Trails Pipeline and Impairment of Eastern Segment (Notes)
12 Months Ended
Dec. 31, 2013
Strategic Review of Southern Trails Pipeline and Impairment of Eastern Segment [Abstract]  
Strategic Review of Questar Southern Trails Pipeline [Text Block]
Note 16 - Strategic Review of Questar Southern Trails Pipeline and Impairment of Eastern Segment

In the fourth quarter of 2012, Questar Pipeline initiated a strategic review of the noncore Questar Southern Trails Pipeline. All strategic options were analyzed, including joint ventures, asset sales and other alternatives. The eastern segment of Southern Trails Pipeline is in natural gas service and extends 487 miles from the San Juan Basin in New Mexico to connections with other pipelines in the eastern portion of Southern California. The western segment of Southern Trails Pipeline extends 96 miles from Whitewater to Long Beach, California. This segment has not been placed in service.

As a result of that review, Questar Pipeline entered into an agreement with an affiliate of Spectra Energy Corp to evaluate and potentially recommission the western portion of its Southern Trails Pipeline to its original purpose as a crude oil transport pipeline and to develop a rail terminal to offload crude into the pipeline for transportation to refineries in Southern California. Questar Pipeline's net book value of the western segment of Southern Trails Pipeline is approximately $22 million. This project is in the marketing and engineering phase and a decision whether or not to proceed with the development is expected in 2014. Questar Pipeline evaluated this asset for impairment in 2013 and does not believe that it is impaired.

During the third quarter of 2013, Questar Pipeline updated its five-year forecast for the eastern segment of Southern Trails Pipeline, which resulted in revised projections of higher operating expenses including right-of-way and pipeline safety costs. Current and projected market rates for natural gas transportation between the San Juan Basin and California markets did not cover these increasing operating expenses over the forecast period. Because of changes in expected cash flows in the third quarter of 2013 and the lack of progress in selling or recontracting this pipeline, Questar Pipeline recorded a noncash impairment of its entire investment in the eastern segment of Southern Trails Pipeline of $80.6 million, or $52.4 million after income taxes. Questar Pipeline used a probability-weighted discounted cash flow analysis that included significant inputs such as Questar Pipeline's cost of capital and assumptions regarding future transportation rates and operating costs.