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North Atlantic Withdraws But Vows to Return

North Atlantic Withdraws But Vows to Return

Conceding defeat - at least temporarily - North Atlantic Pipeline Partners withdrew from FERC its application to build a massive 575-mile subsea pipeline system to carry initially 2 Bcf/d of gas from the Scotian Shelf offshore Nova Scotia to markets in Atlantic Canada and New England.

The Tatham Offshore affiliate said it still believes its project "represents the most efficient and least environmentally disruptive means for gas consuming markets in the Northeast U.S. to access the extensive natural gas reserves offshore Atlantic Canada." But commitments of Sable producers to the Maritimes and Northeast Pipeline project leave it little choice but to withdraw. North Atlantic said it plans to continue studying the viability of the project and "looks forward to pursuing it again in the future before the commission."

The project entered the race for a new Atlantic pipeline more than a year later than its rivals but that was not its major failing, according to FERC. In an environmental review of Maritimes, FERC staff concluded North Atlantic could not serve as an alternative to the Maritimes project because at least 18% of Maritimes' gas volumes would be delivered to customers north of North Atlantic's proposed delivery point in Seabrook, NH. A Maritimes alternative using North Atlantic would require "the entire North Atlantic Pipeline Project plus essentially all of the Maritimes Phase II Project facilities," FERC staff said. Furthermore, the North Atlantic project would be 188 miles longer than Maritimes and would have a greater impact on the environment, staff concluded.

But the project filed was only the first of three phases designed to reach significantly more reserves than Maritimes. Tatham planned a $3.5 billion pipeline project with three legs to tap an estimated 50-70 Tcf of recoverable gas reserves offshore Newfoundland and Nova Scotia. Tatham's long-term proposal calls for construction of three pipelines over five to seven years and the company apparently is not giving up on those plans. For additional details on the project see North Atlantic's web site at www.northatlanticpipeline.com.

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