Looking to extend its direct market access within the state of Ohio, Columbus, OH-based North Coast Gas Transmission LLC said it has executed a definitive agreement to acquire pipeline assets in northern Ohio that will interconnect with the company's existing pipeline. The acquisition will extend North Coast's direct market access from Fostoria, OH to Toledo and Marion.
The company said that it will seek interconnects with markets along these routes in an effort to provide access to lower-cost Midcontinent gas supplies. North Coast added that the acquisition will help reduce the state's dependence on Gulf Coast supply.
"Ohio is in such an unfortunate situation in regards to the history of the way the pipelines were put together," said Andy Lang, president of North Coast Gas Transmission LLC. "The state gets 90% of its natural gas supply from the Gulf Coast, which has its obvious implications. With all of the development of gas coming out of the Midcontinent and Rockies, Ohio needs infrastructure that can access those resources," he told NGI.
"This acquisition continues North Coast's commitment to provide Ohio's natural gas distribution companies and businesses with affordable and diverse natural gas supply options," Lang added. "Not only do these assets allow us to provide near term opportunities for lower-cost supply to new markets, but it also enhances market access for our northern Ohio expansion."
Earlier this year (see NGI, March 20), North Coast announced a 350 MMcf/d expansion of its current northern Ohio pipeline that will run from Defiance to near Parma, then to gas storage facilities in the Canton area. It will be constructed using existing utility corridors. The expansion will provide access to Rocky Mountain production scheduled to arrive in the state through Kinder Morgan and Sempra's proposed Rockies Express pipeline (see NGI, March 6). The expansion also will increase access to the Chicago Hub and to existing and potentially new gas storage facilities in the state.
"We are currently getting our expansion application to the Ohio Power Siting Board [OPSB] prepared," Lang said. "We hope to have that into OPSB early this summer. We are also working on getting support from the marketplace."
As for right-of-way issues, Lang said the expansion and the newly acquired pipeline assets are already covered. "We have the multiple-line rights with the pipelines, so we don't have to do right-of-way acquisition," he said. "We really don't have the landowner issue that other parties have when they have to go get brand new right-of-way clearance."
The newly acquired pipelines will serve as laterals to reach markets in the Toledo and Marion areas. While the newly acquired pipeline assets were previously used for petroleum products, they will now be converted to natural gas service in time for the start of the 2006 heating season.
In addition, North Coast said it has acquired an idle pipeline that will provide "critical right-of-way access" from its existing line south of Cleveland allowing connection to Dominion East Ohio's Chippewa storage in Summit County.
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