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Kinder Authorized to Abandon NatGas Service for Appalachia-to-Texas NGL Pipe

FERC has approved Kinder Morgan Inc.’s request to abandon 964 miles of natural gas service on the Tennessee Gas Pipeline (TGP) system in another step toward repurposing the stretch to deliver Appalachian natural gas liquids (NGL) to the Texas Gulf Coast.

The Federal Energy Regulatory Commission also issued a certificate for KMI to construct and operate pipeline and compression facilities so TGP may continue providing firm transportation to its existing customers after it abandons part of the system. The 964-mile stretch would be converted as part of the broader $4 billion Utica Marcellus Texas Pipeline (UMTP) project. That would also include building another 200 miles of pipeline from Louisiana to Texas, adding storage in Ohio and building 120 miles of laterals to provide basin connectivity.

KMI held a binding open season for UMTP in 2015, which is still in the early stages. The company continues to work with customers to develop the project, spokesperson Melissa Ruiz said. First, pipeline facilities in Louisiana, Arkansas, Mississippi, Tennessee, Kentucky and Ohio must be abandoned. By adding looping and compression to adjacent pipelines along those sections, TGP would be able to meet its existing firm service obligations.

The company would still lose 235,000 Dth/d of natural gas capacity south of station 87 in Portland, TN. That capacity, KMI said, is not necessary to meet existing or anticipated demand. The compression and pipeline facilities would be constructed north of Portland.  

It’s unclear when the abandonment and replacement work would start, and Ruiz did not indicate a timeline. Under its FERC certificate, KMI has two years to complete construction and make the facilities available for service. It’s estimated that the work will cost $412 million.

While major interstate natural gas systems have been converted for bi-directional flows between Appalachia and the Gulf Coast in recent years, NGL takeaway remains limited in the Northeast. Four years ago, KMI launched a similar effort to move liquids from Appalachia to the Gulf Coast that never evolved. The Bluegrass Pipeline would have done the same, but it was scrapped by Williams and Boardwalk Pipeline Partners LP.

KMI is also currently constructing the 215-mile Utopia pipeline, which is expected to enter service in January to move ethane and ethane-propane mix from Ohio to Canadian petrochemical companies in Ontario.

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