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FERC Gives Go-Ahead for Equitrans' Big Sandy Pipe Project

FERC on Wednesday issued a certificate for Equitrans LP to build its proposed Big Sandy Pipeline to ease the capacity constraint in the eastern part of Kentucky that has led to natural gas production being shut in over the past two years. This marks the second pipeline project that the agency has approved for the eastern Kentucky region in less than two months.

Equitrans, a subsidiary of Equitable Resources in Pittsburgh, PA, proposes to build a 68-mile, 20-inch diameter pipeline and associated facilities that would extend from Equitable Resources' Kentucky Hydrocarbon plant in Langley in eastern Kentucky to Tennessee Gas Pipeline's Broad Run Lateral in Carter County [CP06-275]. The Big Sandy Pipeline project would provide 130 MDth/d of takeaway capacity for Kentucky producers to transport Appalachian gas to markets in the Mid-Atlantic and Northeast regions. The anticipated in-service date for the project is April 1, 2007.

"Equitrans' proposals will provide much needed transportation infrastructure in eastern Kentucky which will help move gas out of the region into the interstate pipeline network. We also concluded that there is substantial market demand for the project as demonstrated by the fact that Equitrans has signed precedent agreements for 99,893 Dth/d of capacity, or approximately 76% of the proposed capacity of the project," the FERC order said.

FERC also said it did not agree with the Kentucky attorney general's claim that the existence of the competing Atmos Energy's Straight Creek Gathering project in eastern Kentucky "bars our issuance of a certificate for the Big Sandy project." The Federal Energy Regulatory Commission "determined that Straight Creek will be a nonjurisdictional gathering company as constructed and operated by Straight Creek. The Commission policy is to allow the market to determine which projects are best suited to serve the infrastructure needs of an area."

FERC in early October cleared the way for Atmos Energy's Straight Creek Gathering LP to build a 60-mile pipeline that would serve as the backbone of a new gathering system in eastern Kentucky (see Daily GPI, Oct. 4). The project also is designed to help ease the transportation constraint that has placed a significant amount of gas production off-line in the region.

Straight Creek proposes to build a line that would originate in Floyd County, KY and extend north to interconnect with the Tennessee Gas Pipeline system in Carter County [CP06-369]. The 20-inch diameter system would be capable of initially moving up to 110,000 MMBtu/d of gas, with the ability to expand throughput to 225,000 MMBtu/d. It also plans to construct various four- to 12-inch diameter laterals or feeder lines from the proposed backbone pipeline to production fields in Magoffin, Pike, Martin, Lawrence, Elliott and Johnson counties in eastern Kentucky.

Citing the drilling activity in the region, a number of eastern Kentucky producers believe there is room for both the Equitrans and Straight Creek pipeline facilities. They note that the production gas flow from the Kentucky basin currently has been limited due to the availability of only one pipeline, Columbia Gas Transmission's Line KA-20, serving the region.

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