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AES Ocean Express Gets OK to Enlarge Diameter of Proposed Pipeline

FERC last week approved AES Ocean Express LLC's request to enlarge the diameter of the 54-mile U.S. leg of a pipeline that would transport 842 MMcf/d of natural gas to southern Florida from proposed liquefied natural gas (LNG) facilities in the Bahamas.

The order amends AES Ocean's presidential permit and Natural Gas Act (NGA) authorizations to carry out construction of the pipeline, which the Federal Energy Regulatory Commission issued in January 2004. Specifically, it gives the company the green light to increase the diameter of the 54-mile pipeline to 26 inches from 24 inches to provide greater hourly flow rates, while retaining the project's certificated capacity; modify its method of installing the pipeline by boring an underwater tunnel beneath coral reefs near shore; and alter the initial cost-of-service rates to reflect the additional expense of the changes. AES Ocean Express estimates the cost of the project has jumped to $264 million from $111 million

The U.S. portion of the pipeline, 46 miles of which would be subsea facilities, would deliver gas to Broward County, FL, from the proposed terminus of a 40-mile non-jurisdictional line at the Exclusive Economic Zone boundary between the United States and the Bahamas. The pipe would interconnect with Florida Gas Transmission and Florida Power & Light's distribution system near its Fort Lauderdale power plant. Construction on the line is expected to begin at the end of the year. It is targeted for in-service in early 2008, according to the company.

The natural gas flowing over the pipeline would emanate from AES Ocean LNG Ltd.'s import terminal, storage and regasification facilities that are slated for construction in Ocean Cay, Bahamas, and operation in early 2008. Both AES Ocean LNG and AES Ocean Express are affiliates of AES Corp. of Arlington, VA.

The AES Ocean Express project is one of several that are aimed at satisfying the anticipated demand growth in the Sunshine State. Peak gas demand in Florida is expected to increase by 2.39 Bcf/d by 2010 and by 4.54 Bcf/d by 2020, according to AES.

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