Trunkline Negotiates with Several Parties to Sell Facilities
Trunkline Gas Co. has indicated it has "entered into discussions
with several parties" to either sell or spin down one-third of its
mainline system - about 720 miles - for the purpose of converting
the facilities for transporation of refined petrolum products.
Trunkline first proposed spinning down this segment of its
pipeline [Line 100-1], which spans from Illinois to Louisiana, to
an affiliate, Trunkline A.P. Pipeline Co., in July 1998 - when it
still was owned by Duke Energy. Since then, however, Trunkline's
ownership has changed hands, with CMS Energy buying it in March.
"Trunkline is in advanced negotiations, which would result in
the conversion of these pipeline facilities for the transportation
of refined petroleum products. Negotiations will be concluded
within the near future.....," wrote Trunkline President and CEO
Christopher A. Helms in an Oct. 27 letter to FERC. Depending on the
progress of the negotiations, he said the pipeline either will
amend its July 1998 proposal by Dec. 15 or it will "withdraw its
John Barnett, a spokesman for CMS Energy, declined to say how
many parties Trunkline was negotiating with, but he did say there
were more than one. Nor would he confirm whether Trunkline was
planning to sell the pipeline facilities or spin them down .
Under the 1998 proposal, Trunkline A.P. would oversee the
conversion of the facilities to transport ethane and hydrocarbon
vapors to the Gulf Coast from the proposed Aux Sable Liquids
Products processing plant, which is being constructed at the
terminus of the 1.4 Bcf/d planned Alliance Pipeline. The spin-down,
as original was proposed, would reduce Trunkline's system capacity
of about 1,810 MDth/d by 255 MDth/d, or by 14%.
Trunkline cited years of underutilization, deep discounting and
the the likelihood of continued decontracting when it announced its
intention to shed itself of the 26-inch diameter mainline.
Trunkline shippers are opposed to the pipeline's move. Many
consider Trunkline's system still to be a key link in the Midwest
gas pipeline grid, even in light of all the new pipeline
construction coming into that market.
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