By jake@stormlake.com | on August 17, 2022

The Paullina Northern Natural Gas compressor station located on the Cherokee-O’Brien County line south of Paullina is undergoing a significant $29.6 million horsepower upgrade with new engines, piping, meters, and related equipment stored in the staging area. (Photo by Loren G. Flaugh)

Northern Natural Gas (NNG) Company of Omaha filed a notification letter in April with the Federal Energy Regulatory Commission (FERC) of its intent to upgrade its Paullina compressor station located on the Cherokee/O’Brien County line five miles south of Paullina.  

FERC is the primary federal agency responsible for oversight authority over the interstate natural gas pipeline system.

Known as the Paullina Horsepower Replacement Project, the FERC notification briefly described this major project at a facility nearing 75 years of age. After a 30-day waiting period, construction on this project kicked off on May 9th, FERC’s media team expert on natural gas pipeline matters, Tamara Young-Allen reported via email.

Because it wasn’t necessary for the commissioners to vote on this matter, Allen then explained why by saying, “NNG, over the many years, had already secured a Certificate of Public Necessity & Convenience to construct and operate its pipeline facilities, and it has, by rule, automatic authority under  FERC regulations to construct and operate the replacement of their facilities.”

In its April 7 letter, NNG said “the Paullina compressor station currently uses approximately 4,400 rated horsepower to compress natural gas for pipeline transmission service. This power level consists of five vintage Ingersoll Rand natural gas-fired reciprocating compressor units. This project will replace the five vintage compressor units which total 4,400 rated horesepower with two 2,500 horsepower Caterpillar 3608TA  compressor units.  This project will improve facility emissions and compression service reliability as well as improve facility operability and maintainability.

The new compressor units will operate more efficiently than the existing units, thereby maintaining an equivalent designed capacity that will not result in a change or abandonment of service.  The estimated cost for the replacement is $29.6 million.

The replacement compressor units will be located within the existing right of way at the Paullina station.

NNG operates an interstate natural gas pipeline extending from the Permian Basin in West Texas to the upper Midwest. With 55 compressor stations, the system also includes 14,600 miles of natural gas pipeline that ships 6.3 Bcf per day to this region.

Five natural gas storage facilities exist with a total firm and operational capacity of 75 Bcf and an additional 4 Bcf of liquefied natural gas.​​  Pipe diameters range from 2 inches to 38 inches in diameter.

The current Iowa DOT maps of Cherokee and O’Brien County show two pipelines entering Cherokee County from the southwest that feed natural gas into the Paullina compressor station.  NNG has a larger compressor station located at South Sioux City, Nebraska.

The DOT maps show one pipeline exiting the Paullina facility heading northwest towards Sioux Falls and eastern South Dakota. Two other pipelines are shown exiting the Paullina facility northeast toward Minneapolis and locations further north.

Longtime NNG measurement technician and eventual 11-year crew foreman Dennis Koehlmoos, now retired after 41 years, said he started working at the facility back in 1971 after serving as an Army MP in South Korea.

Koehlmoos presented a detailed early history of the Paullina compressor facility, saying,  “It was in 1939 when NNG built a 16-inch diameter pipeline from South Sioux City, Nebraska, to Minneapolis.”  At that time, NNG was a relatively young company.

Koehlmoos said it was in 1946 when NNG decided it was time to build a compressor station in Northwest Iowa and the northwets corner of Ole Larson’s farm south of Paullina was chosen for the site. 

Mor area communities wanted natural gas service, and this decision had come about because of the rising demand for natural gas. In order to maintain the required high pressure of at least 800 pounds per square inch, a compressor station was needing to be built somewhere in NW Iowa.

According to the history document, “Construction on the three compressor units began in 1946 that were originally installed and they were ready for service in early 1947.  Shortly after, the Paullina facility was placed into service. Later in that same year, 2 more 880 HP Ingersoll Rand compressor engines and reciprocating compressors were installed. This one long building now housed five large compressor engines.       Natural gas demand was growing rapidly and in 1962, NNG decided to parallel the first pipeline with an additional 24-inch diameter pipeline from South Sioux City through the Paullina facility, beyond Everly and into NW Clay County.  The demand for natural gas service had grown so rapidly through the 1940’s and into the 1960’s.   Both of these early pipelines are still in service at certain times of the year.”

Approximately 22 men were required to operate and maintain the facility.  Sixteen of these employees were assigned to operator shift work.  Four men on each shift operated the compressor engines, auxiliary engines and related facilities.

From only a few communities with gas service in 1939, the demand grew rapidly enough to where there were now 55 NW Iowa communities in 1970 with gas service.  With a noticeable impact on the area economy, even O’Brien County was seeing a increase in property tax revenue from only NNG’s pipeline infrastructure.  O’Brien County alone collected $42,000 in property tax revenue from NNG in 1984.

When asked what the current property tax revenue figure was from the compressor station facility and the miles of NNG pipeline infrastructure located in Cherokee County, Auditor Kris Glienke emailed information showing a figure of $241,718, making NNG the 2nd highest property tax payer in the County behind only the Dakota Access (oil) Pipeline.

Because pipeline infrastructure is centrally assessed by the Iowa Department of Revenue, I emailed Roland Simmons to ask if he could do a projection of what the Paullina compressor station upgrade project might generate in property tax revenue for Cherokee County based on NNG’s estimated cost figure of $29.6 million.

Simmons replied saying, “The Department assessment of a pipeline company is based on more than just the final cost of one project.  When the Department values a pipeline company for taxation purposes, we generally use 3 different approaches to get our valuation.  

“These include a stock and debt approach, an income approach and a cost approach all correlated into a unit assessment for that particular company.  The unit assessment for that particular pipeline company would then be allocated to multiple locations where a pipeline owns property.”

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