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Companion Southern, FGT Projects Get Final Environmental Nod

FERC has given a final environmental nod to two associated pipeline projects -- Southern Natural Gas' Cypress Pipeline, which will transport increased deliveries of regasified liquefied natural gas (LNG) supplies from a proposed expansion of Southern's Elba Island LNG terminal in Georgia, and Florida Gas Transmission's (FGT) expansion project that will interconnect with Cypress to allow regasified LNG to reach Florida.

"We have determined that construction and operation of the Cypress Pipeline and FGT expansion projects would result in limited adverse environmental impacts based on information provided by Southern and FGT and further developed" by FERC, agency staff said in the final environmental impact statement (FEIS) on the two companion projects [CP05-388, CP06-1]. The U.S. Army Corps of Engineers participated as a cooperating agency in preparation of the FEIS.

The fact that 95% of Southern's pipeline facilities and 99% of FGT's expansion would be located within or directly adjacent to existing pipeline or powerline corridors was cited by FERC staff as a key reason for the final environmental nod. Southern is fully owned by El Paso, while FGT is 50% owned by El Paso.

Cypress Pipeline would offer a direct corridor for deliveries of regasified LNG from the Elba Island terminal in Georgia to the northern Florida market. With the FGT expansion, FGT would be able to receive 160 MMcf/d of gas from Cypress for delivery to Progress Energy Florida Inc.'s gas-fired power generation complex in Polk County, FL.

The Cypress project would be a 500 MMcf/d extension from Southern's existing system in Georgia to Jacksonville, FL. The project would include constructing 177 miles of 24-inch and 30-inch diameter pipeline, 31,050 horsepower (hp) of compression and associated facilities. The related Cypress and FGT projects were given a preliminary determination on nonenvironmental issues by FERC in late November (see NGI, Nov. 28, 2005). With an FEIS now in hand, the projects are only one step away from receiving FERC approval.

The $320.8 million Cypress project would be built in three phases and would tie in with FGT's system in the northern part of the Sunshine State. Phase I would consist of the following:

Phase II, which is projected to go into operation in May 2009, would consist of a new 10,350 hp compressor station in Glynn County. Phase III would include nearly 10 miles of 30-inch diameter pipe loop on Southern's Wrens-Savannah lines in Chatham and Effingham Counties, and two new 10,350 hp compressor stations in Liberty County, GA, and Nassau County. Southern said it expects Phase III facilities to go into service May 2010.

Southern has entered into precedent agreements for firm transportation service for the full capacity of the project with BG LNG Services LLC (20-year term), Progress Energy Florida. (20-year term), and the City of Austell, GA (15-year term), according to the El Paso pipeline.

As for the companion FGT project, the Phase VII expansion calls for FGT to build 33 miles of 36-inch diameter pipeline looping in several segments along an existing right-of-way and install 9,800 hp of compression, to receive regasified LNG deliveries from the Cypress Pipeline project. The project's targeted in-service date is the same as Phase I of Southern's Cypress project -- May 2007.

The expanded gas supplies in Florida will fuel Progress Energy's 461 MW Hines 4 combined-cycle generation facilities in Bartow, FL. Progress Energy, which has distribution utilities in Florida and the Carolinas, has entered into a 20-year, $3.3 billion agreement with Southern Natural and FGT, as transportation providers, and with BG LNG Services to supply the LNG. BG Group, parent of BG LNG Services, holds the rights to the existing capacity at the Elba Island terminal.

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