Infrastructure Announcements: Transco, Petal Gas Storage, ANR's

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Note: I have the Western Frontier certificate filing if anyone wants to see it. LB
Petal Expansion, ANR Lateral Extension, Transco's Leidy Project OK'd
The Federal Energy Regulatory Commission (FERC) issued several important certificates Wednesday for new gas pipeline infrastructure projects, including final approvals for Transcontinental Gas Pipe Line's Leidy East expansion in Pennsylvania, for a new pipeline by Petal Gas Storage in Mississippi and for an ANR lateral extension to serve to 1,050 MW Badger power plant in Kenosha, WI. The Commission also denied rehearing of its orders granting Kern River Gas Transmission certificates to expand its system by about 135 MMcf/d.
Transco's $98 million Leidy East pipe expansion project would make up for the failed Phase III portion of its MarketLink expansion. The Leidy East project will provide up to 130,000 Dth/d of transportation from Leidy, PA, to northeastern markets in New Jersey, New York, and Pennsylvania. The expansion consists of six pipeline loop segments that amount to 26 miles of 42-inch diameter pipe and about five miles of 30-inch diameter pipe mostly in western Pennsylvania. The project also would add 3,400 hp of compression in Pennsylvania and New Jersey.
"The Commission's authorization is being granted based on our findings...that the proposed facilities will serve the public interest by increasing the pipeline capacity reaching the northeastern United States, thereby helping to meet the rapid growth in electric generation demand in that market," FERC said in its draft order. "Since the overwhelming majority of the proposed facilities will be constructed either entirely within or immediately adjacent to existing pipeline or utility rights of way, the project's environmental impact will be minimized. Finally Transco's existing customers will not subsidize the project because the expansion shippers will pay an incremental rate."
Transco said this summer that it expects the Leidy East facilities to be in service by November 2002. The Williams subsidiary said Aquila Energy Marketing (25,000 Dth/d), PECO Energy Co. (30,000 Dth/d), Reliant Energy Services (25,000 Dth/d) and Williams Energy Marketing (50,000 Dth/d) are all customers. The incremental reservation rate for service on the expanded facilities is $13.56/Dth/month.
The certificate granted to Petal Gas Storage LLC (see related story) covers a new pipeline that would extend 59 miles to a connection with Southern Natural at a compressor station near Enterprise, MS. The $94 million project also includes a new 9,000 horsepower compressor station. The project is designed to deliver 700,000 Dth/d of gas to Southern Company's gas-fired generation in the Southeast.
ANR Pipeline's lateral extension will carry about 210 MMcf/d of gas to Badger Generating Co.'s proposed power plant in Wisconsin. The project includes 13 miles of 20-inch diameter looping along ANR's Racine Lateral and a 10-mile extension of the lateral to the Badger plant. The project would cost $19.5 million and should be in service during the summer of 2003.
In the Kern River case, shippers had requested rehearing of FERC's order granting Kern authorization for its 124,500 Dth/d 2002 Expansion Project and an additional 10,500 Dth/d under its revised California Action project. Shippers claimed the project would allow the sale of additional delivery point rights at the Wheeler Ridge point in Southern California causing further pro rata reductions in capacity for existing shippers and diminishing their firm rights. Shippers said the Commission should subordinate the delivery point rights of expansion shippers to those of existing shippers until Southern California Gas builds enough takeaway capacity at Wheeler Ridge to accommodate the additional volumes.
However, the Commission upheld its initial conclusion that the benefits of the project outweighed any risks of degrading delivery point rights, "given the critical need for expansions of pipeline capacity to serve electric and natural gas infrastructure in California."
Gulf South Sees Strong Interest in $1 Billion Southeast Pipe
Houston-based Gulf South Pipeline Co. LP, formerly Koch Gateway Pipeline, on Wednesday said the open season for the company's proposed $1 billion Gulf Pines Pipeline was "extremely successful," adding that response to the 1 Bcf/d line from the Southeast markets far exceeded the company's expectations. The open season concluded on Sept. 19.
The proposed 600-700 mile, 36-inch diameter or greater natural gas pipeline, which was first announced in August, is expected to originate in Mobile, AL, and extend through the states of Georgia, South Carolina and North Carolina.
"The open season clearly confirmed that the demand exists for a competitive alternative to serve the growing power generation, commercial, residential and industrial markets in the southeastern United States," said Gulf South President Rolf Gafvert.
The Gulf Pines project would interconnect with the existing Gulf South pipeline near Mobile Bay, enabling customers to access not only Mobile Bay supplies, but also gas supplies from Texas and Louisiana, including Venice and the Henry Hub, according to Gulf South, a subsidiary of Entergy-Koch LP. The proposed pipeline also would have access to multiple third-party storage facilities, such as Gulf South's facility in Bistineau, LA.
"We anticipate that the projected growth of power plants will far exceed existing pipeline capacity in the southeastern region," said Gulf South spokesman Marc Palazzo.
In addition to serving power generation, the company said Gulf Pines would extend farther east into the Carolinas than any existing interstate pipeline, bringing interstate pipeline service to a region that historically has not had service before.
Palazzo said the project would be filed with the Federal Energy Regulatory Commission next year. He added that the actual route of the proposed pipeline is still to be determined. Gulf South said the anticipated in-service date is sometime in 2004.
Gulf South currently owns and operates 8,800 miles of pipeline with 33 compressor stations and 120 major pipeline interconnects extending from South Texas through the Gulf States and into the Florida market area.
Williams Files to Build 400-Mile Western Frontier Pipe
Williams Gas Pipeline has filed an application for a new $365 million pipeline that would extend from the Cheyenne hub in northern Colorado to multiple pipeline interconnections in southwestern Kansas and the panhandle of Oklahoma. The Western Frontier Pipeline would consist of 400 miles of 30-inch diameter pipe and 30,000 horsepower of compression. It would transport up to 540,000 Dth/d of gas to markets in the Midcontinent.
In addition to an interconnection with the Williams Central system, Western Frontier proposes access to other major Midcontinent pipelines, including ANR Pipeline, Panhandle Eastern Pipe Line, Northern Natural Gas, and Natural Gas Pipeline Company of America. Western Frontier also would have access to the growing Oklahoma intrastate markets via the Williams Central system. The pipeline is anticipated to be in service by Nov. 1, 2003.
"Western Frontier Pipeline is a cost-effective, environmentally responsible way to transport natural gas from prolific Rockies supply basins to markets in the Midcontinent," said Kim Cocklin, senior vice president and general manager of Williams' Central and Texas Gas systems. "We look forward to building this pipeline to help alleviate the current shortage of interstate pipeline capacity coming out of the region, which was recently cited by the U.S. Energy Information Administration.''
Customers interested in Western Frontier should contact Donny King at (270) 688-6968, Mark Elliott at (270) 688-6637 or Dale Sanders at (270) 688-6944. More information on Western Frontier is also available on the Internet at <http://westernfrontier.williams.com<; .