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Florida Pipeline to Tap Shale Gas

Florida Power & Light Co. (FPL) is preparing a request for proposals (RFP) to construct a two-segment pipeline to carry natural gas from Transco's Station 85 in western Alabama to FPL's Martin County Power Plant in southern Florida. If constructed, the pipeline would reduce Florida's reliance on gas from the Gulf of Mexico.

Currently, Florida is served by two interstate gas pipelines: Gulfstream and Florida Gas Transmission (FGT). FPL's project, which would interconnect via a lateral with Gulfstream in the middle part of the state, would add a third route for gas to get into the Sunshine State, where gas demand from power generators is growing, according to a presentation by FPL to the Florida Public Service Commission (PSC) late last month.

The project is being considered following direction from the PSC in 2009 that encouraged greater use of natural gas (see NGI, Nov. 23, 2009), according to company slides from its PSC presentation. "Following PSC staff review, FPL intends to issue the RFP to interested bidders before the end of 2012 in order for the pipeline(s) to be operational in 2017," the company told regulators. Initial requirements are for 400,000 MMBtu/d, increasing to 600 MMBtu/d in 2020, the company said.

Pipeline capacity to serve Florida is filling up, FPL said, at a time when nearly 60% of the state's power is generated using natural gas and the state is using more gas than any other besides Texas. Last year, Florida burned more than 1 Tcf of gas to generate power. "Based on FPL's projections, Florida's natural gas needs are expected to exceed the existing natural gas transportation capacity by 2017-18," the company said.

"Currently, much of Florida's supply of natural gas comes through the Gulf of Mexico region, which is susceptible to disruptions caused by tropical weather -- Access to shale gas via upstream pipeline capacity has provided diversity away from the Gulf of Mexico." Florida has no gas production or storage, FPL said. "...[A] third pipeline is essential to the state's long-term electric reliability."

The northern segment of the essentially two-pipeline project would run from Station 85 to Orlando, with the downstream segment running from Orlando to the Martin Plant. The project could include modified segments based on feedback from pipelines to reach Orlando markets, said FPL. The company would participate in only the downstream pipeline, which it said it could construct itself. The project being considered differs from that proposed in a 2008 solicitation, which contemplated a pipeline running from Station 85 to FGT Station 16 in northern Florida and then on to the Martin plant.

FPL said additional capacity is also needed to support growing system demand from high-efficiency energy centers at Cape Canaveral, Riviera Beach and Port Everglades. The company, a NextEra Energy Inc. utility, said since 2001 its investments in gas-fired power plants have cut its use of foreign-sourced oil by more than 97%, saving customers $5.5 billion.

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