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DEGT Launches Plan to Bring Western Gas to the East

Duke Energy Gas Transmission's (DEGT) Texas Eastern Transmission LP unit is conducting an open season to gauge market interest in its proposed Lebanon East Expansion project in Ohio and Pennsylvania. The project would be designed to provide new gas transportation capacity in the Northeast for gas arriving in Ohio from the Rocky Mountain region via a new cross-country pipeline planned by Sempra Energy and Kinder Morgan (see NGI, Nov. 28).

DEGT said the project is designed to "enhance supply diversity for shippers by connecting emerging Rocky Mountain natural gas supplies to growing markets primarily in the eastern United States."

The non-binding open season will run through March 1 and an in-service date for the expansion could be as early as Nov. 1, 2008. As for the size of the expansion, Greg Rizzo, DEGT group vice president for Northeast transmission and storage, said the project's parameters are open-ended. "We are really just trying to come up with the most efficient way to move western gas to the eastern markets. Lebanon, OH, is really a logical point for that to occur because there are a number of other pipelines that interconnect there." Rizzo noted that DEGT is interested in gauging its customers' interest, without prejudging.

"DEGT's existing pipeline infrastructure is ideally positioned to bring gas supply diversity options to our customers along the Eastern Seaboard," said Rizzo. "We believe we've developed a needed solution that best manages supply moving from western North America to markets in the East."

Under the Lebanon East Expansion, Texas Eastern Transmission is proposing to enhance its existing mainline system in Ohio and Pennsylvania, which will help facilitate the movement of the western supplies to the East. The Texas Eastern Transmission system currently consists of 9,040 miles of pipe from the Gulf Coast to the Northeast. The pipeline's capacity is 6.2 Bcf/d and the system allows for 75.1 Bcf of storage.

The 1,350-mile, 42-inch Rockies Express project being planned by Kinder Morgan and Sempra Energy would be among the largest pipelines built in the United States in more than 20 years. The project would originate at the Cheyenne Hub in Weld County, CO, and extend to the Clarington Hub in eastern Ohio, where it would interconnect with Dominion Transmission and Texas Eastern.

El Paso Corp. also is planning to build a pipeline from the Rockies to Mississippi, but much of the gas flowing on that system also would make its way to the premium markets in the Northeast (see related story).

"There is a growing need for additional natural gas supply in the U.S. Northeast to address price volatility challenges facing consumers as well as a growing call from shippers for more supply options," said Rizzo. "Our most recent open season to gauge Northeast-region market needs in 2004 spawned a number of infrastructure projects that we are now pursuing. As we approach 2006 and beyond, this latest open season provides another proactive option to shippers interested in attaching a new supply source to the premium markets in the Northeast."

Interested shippers in the Lebanon East Expansion project can contact Bob Riga at 617/560-1436 or rgriga@duke-energy.com.

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