Duke to Send Sawgrass Pipeline into Florida
Two would go by sea, and now one would travel on land, making
for three brand new pipeline projects targeting the Florida
peninsula and the state's substantial growth in power generation
Last week Duke Energy unveiled plans for its Sawgrass Energy
Transmission System - a major interstate that would supply
Southeast markets. Duke's Sawgrass joins Williams-Transco's
Buccaneer Pipeline and Coastal's Gulfstream projects, as well as
expansion of Florida Gas Transmission (FGT), in targeting a
potential 1.5 Bcf/d growth in demand for Florida power generation.
The Sawgrass system would have capacity of about 1 Bcf/d and
begin near Coden, AL, cross southern Mobile Bay and continue into
the Florida Panhandle and down the peninsula. It would cost about
$1.3 billion and is planned to be in service by 2003. Besides power
generation, the project also targets large industrials and gas
Buccaneer and Gulfstream propose essentially identical routes:
from Mobile, AL, across the Gulf of Mexico to Tampa, FL, and across
Florida to cities along the Atlantic Coast. Because it would take a
land route, Sawgrass proposes to serve gas demand in Alabama and
the Florida Panhandle. "Certainly some of the larger benefits [of
Sawgrass] to both states are the security and competition that
result from the addition of a new transportation system and the
environmental advantages natural gas brings to the area," said
Robert Evans, president of Duke Energy Southeast Pipeline Corp.
"The Mobile Bay region and communities throughout Florida can be
assured that Duke Energy is committed to thoroughly reviewing all
aspects of the project for environmental compatibility."
It remains to be seen whether a route by land or one by sea is
more attractive to regulators and landowners. Evans said Duke will
work with the states and federal government to allay any
environmental concerns. Because it's taking a land route, Sawgrass
will have to deal with more landowners than Buccaneer or
Gulfstream. But some of those landowners or their neighbors could
also be customers, adding to the pipe's revenue. Also, Sawgrass
wouldn't be wading into Florida's traditionally jealously guarded
coastal waters. Over the next several months, Duke will begin
detailed route analysis.
"Florida faces a constantly growing need for more electric
power," Evans said. "Natural gas represents the cleanest, most
cost-efficient fuel source for Florida generating plants to meet
this rapidly growing need." Based on the most recent estimates
released by the state Public Service Commission, Florida's
projected need for new generating capacity over the next decade has
risen another 20% above estimates made in late 1997, making it the
fastest growing market in the nation.
In July 1998, the Florida Reliability Coordinating Council
submitted a plan to the Florida Public Service Commission outlining
the need for more than 10,000 MW of additional power generation
capacity within the state by 2007. If fueled entirely by gas, this
would require an additional 1.5 Bcf/d of capacity (see NGI Oct. 19,
1998). Power demand is soaring particularly in southwestern Florida
where currently there are no gas pipelines.
Sawgrass would create some synergies among Duke Energy business
units, Evans said. On the market end Duke would be developing power
generation. Upstream, the Dauphin Island Gathering Partnership - of
which Duke owns 37% - is a partner in a gas processing plant at
Duke has had discussions with several potential customers, and
the Sawgrass project has a committed load of about 250 MMcf/d from
Duke Energy North America, Duke Energy's wholesale power generation
development business unit.
The Phase IV expansion of FGT - Florida's only interstate - has
eight shippers and is to be in service by May 2001. Phase V is
expected to be anchored by power generation load. FGT spokeswoman
Gina Taylor told NGI the pipeline has firm commitments from Florida
Power & Light (FPL) and Southern Co. subsidiary Gulf Power Co.
Williams spokesman Chris Stockton said the company hopes to make
a filing at the Federal Energy Regulatory Commission for Buccaneer
by the end of the summer. Meetings have been held with
environmental groups and public officials to discuss routing
issues. Buccaneer is projected to cost $1.5 billion and has 1.3
Bcf/d in nominations. "We're currently in the process of trying to
finalize some of those contracts," Stockton said. Buccaneer is
projected to cost about $1.5 billion.
Coastal spokesman Joe Martucci said Gulfstream has some firm
commitments. "I can't really be specific in terms of who the
customers are or the commitments. The response we've received, I
would say, has been overwhelmingly positive, especially the
environmental community in Florida." Gulfstream is expected to cost
about $1.2 billion.