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Creole Trail Pipe Scaled Back Due to Flagging Market

FERC this week approved Cheniere Creole Trail Pipeline LP's proposal to scale back its project significantly. It also gave an environmental nod to the pipeline's proposal to build a small extension connecting its system with the 16-mile Cheniere Sabine Pass Pipeline on the Gulf Coast in Cameron Parish, LA..

In June, FERC approved Creole Trail's proposal to build two parallel 117-mile long pipelines that would serve the proposed Cheniere Energy Creole Trail liquefied natural gas (LNG) terminal in Cameron Parish (see Daily GPI, June 16). However, the Federal Energy Regulatory Commission Tuesday granted Creole Trail's request to eliminate one of the parallel lines. The pipeline said that the deteriorating LNG market conditions related to the commercial development of the Creole Trail LNG terminal caused it to scale back the project. The change would reduce the maximum design capacity of Creole Trail's proposed pipe system to 2 Bcf/d from its currently proposed certificated level of 3.3 Bcf/d.

In related action, Cheniere Creole Trail asked FERC in August to amend its certificate approving construction of the 117-mile long pipeline to accommodate a request for an extension (see Daily GPI, Aug. 14). Specifically it proposes to build an 18.1-mile, 42-inch diameter pipe to extend its system westward from the Creole Trail LNG terminal to interconnect with the Cheniere Sabine Pass Pipeline near Johnson Bayou, LA in order to access and transport up to 2 Bcf/d of regasified LNG originating from the Sabine Pass LNG terminal.

The extension would provide shippers on the Creole Trail line access to delivery points on the Sabine Pass Pipeline and vice versa, Cheniere Creole Trail said in its application for the amendment [CP05-357-003].

Affiliate Cheniere LNG Marketing Inc. requested that Creole Trail Pipeline construct the 18-mile extension to interconnect with the Sabine Pass Pipeline so it can make deliveries of gas from the Sabine Pass LNG terminal to PPM Energy, a subsidiary of Scottish Power PLC, at points on the Cheniere Creole Trail Pipeline.

Cheniere LNG Marketing currently holds 100% of the capacity on the Creole Trail Pipeline. It has entered into a 10-year agreement with PPM Energy to provide supplies of regasified LNG from the Sabine Pass LNG terminal to PPM at delivery points on Creole Trail.

Cheniere Creole Trail has called on the Federal Energy Regulatory Commission to approve the application for the extension by February 2007 so it can be constructed and placed in service for the 2008 winter heating season -- concurrent with the proposed in-service date of the Sabine Pass LNG LP terminal in Louisiana, the Cheniere Sabine Pass Pipeline and the Creole Trail Pipeline.

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