Two Partners Join CMS for Trunkline Conversion
CMS Energy Corp., is pushing ahead with plans to convert part of
CMS Trunkline's mainline from gas to liquids service. Last week the
company was joined in the project by Marathon Ashland Petroleum
LLC, and TEPPCO Partners LP.
The three are forming a limited liability company to own and
operate part of Trunkline's mainline that would transport refined
products from the Gulf Coast region to Illinois. Each company will
own a one-third interest in the venture. CMS just filed to seek
FERC approval to convert the 720-mile portion of its pipeline from
gas to refined products service. Conversion is expected by the end
"This project illustrates the CMS Energy North American strategy
of maximizing the use of our existing assets by converting an
underutilized gas line to liquids service," said Chris Helms,
president of CMS Panhandle Pipe Line Cos. "The Panhandle Pipe Line
Cos. serve as a building block for the company's growth and
expansion into all forms of energy."
CMS spokesman John Barnett said the gas industry no longer needs
the pipeline because of changes in gas service to the Midwest. "CMS
Trunkline has been a key supplier of natural gas and natural gas
transportation service into the Midwest since 1951 when this
26-inch pipeline was built, but a number of industry factors, such
as increased natural gas availability in that Midwest region as
well as additional storage capacity, have changed the long-haul
transportation market. As a result, really since the mid-1980s,
long-term firm demand for pipeline capacity has declined."
He said the project would have minimal effect on gas supply and
transportation in the Midwest because of significant new capacity
being added by the Alliance Pipeline project this fall. "We looked
at this, looked at the market area and saw that there was a need, a
growing need, for refined petroleum products and capacity..... jet
fuel, diesel fuel and gasoline."
In October, Trunkline Gas Co. said it "entered into discussions
with several parties" to either sell or spin down the gas pipeline
for conversion to refined products transportation (see NGI Nov. 8).
Trunkline first proposed spinning down this segment of its pipeline
[Line 100-1] to an affiliate, Trunkline A.P. Pipeline Co., in July
Trunkline shippers have been opposed to the line conversion.
Many consider Trunkline's system still to be a key link in the
Midwest gas pipeline grid. CMS bought Trunkline, along with the
Panhandle Eastern Pipeline and an LNG port, from Duke Energy in a
deal announced November 1998.
The joint venture intends to build a 70-mile, 24-inch diameter
pipeline connecting TEPPCO's facility in Beaumont, TX, with the
start of the gas pipeline extending from Longville, LA, to Bourbon,
IL. The line, called Centennial Pipeline, will pass through
portions of seven states --- Texas, Louisiana, Arkansas,
Mississippi, Tennessee, Kentucky and Illinois. The Centennial
Pipeline will intersect TEPPCO's existing mainline near Lick Creek,
IL, where a new two-million-barrel refined petroleum products
storage terminal will be built.
Joe Fisher, Houston