Independence, SupplyLink Still Waiting for PDs
Citing the need to accommodate increased Canadian gas supplies
flowing into the Midwest, the sponsors of Independence Pipeline and
SupplyLink have urged FERC to promptly issue preliminary
determinations (PDs) on the non-environmental aspects of their
The applications for the proposed Independence line and the ANR
Pipeline-sponsored SupplyLink project have been stalled at the
Commission for nearly two years, while competing projects are
moving through the certificate process, the sponsors said. They
fear that if FERC delays the preliminary rulings any longer they
won't be able to meet their projected in-service dates - November
1999 for SupplyLink and November 2000 for Independence - and will
be put at a "competitive disadvantage."
The proposed Independence line, if approved by the Commission,
would extend 400 miles from Defiance, OH, to the Leidy, PA, hub,
where it would intersect with up to six different pipelines capable
of delivering gas along the entire Eastern Seaboard. The $678
million pipeline, which would have a winter capacity of about 1
Bcf/d, would provide gas producers in Canada, the Rocky Mountain
and Mid-Continent regions with a much-needed link to markets in the
East and Mid-Atlantic, according to the project's partners. They
are ANR, Williams' Transcontinental Pipeline and National Fuel Gas.
SupplyLink, in contrast, would "reinforce" ANR's existing system
upstream of the proposed Independence line, basically from Joliet,
IL, to Defiance. It would add about 750 MMcf/d of capacity through
looping and new compression.
ANR contends that quick action on SupplyLink's PD is "clearly
warranted," given that "all of the record materials necessary to
address the non-environmental aspects of [its] proposal are now
before the Commission." It believes the project is in the public
interest in light of the growing gas supplies that now are coming
into the Joliet hub via the Northern Border Pipeline expansion, and
will be in even more demand when the Alliance Pipeline goes into
service in November 2000.
A prompt PD further is needed to ensure that ANR "is placed on
an equal regulatory footing with, and is thus able to compete
fairly and effectively with, other projects designed to provide
similar new transportation services emanating from the Joliet hub."
ANR pointed out that FERC issued a PD to a competing project,
Vector Pipeline L.P., within 10 months of filing its application.
"It is important that no competitor be placed at a competitive
disadvantage through regulatory delay."
On a related issue, FERC staff indicated it has had problems
processing Independence's application due to "certain termination
provisions" in the proposed pipeline's precedent agreements with
Enron Capital & Trade Resources and Statoil Energy. But the
sponsors of Independence contend that shouldn't be a issue
considering they have a binding precedent agreement with DirectLink
Gas Marketing Co. for 500,000 Dth/d, which represents 55% of the
"...[I]n light of the DirectLink precedent agreement,
Independence sees no reason why the contracts with Enron and
Statoil should affect efforts to complete processing of
Independence's application, including the prompt issuance of a
preliminary determination on non-environmental issues."