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Dominion Targets Mid-Atlantic with New $400M Pipe

Dominion Targets Mid-Atlantic with New $400M Pipe

The rush is on to build new pipeline capacity to serve rapid gas-fired power generation growth in the Southeast and Mid-Atlantic regions. Dominion Transmission last week announced a proposed $400 million pipeline to serve primarily new power plants in Virginia and North Carolina.

The Greenbrier Pipeline project would extend from Dominion's (formerly CNG's) Cornwell Station near Charleston, WV, the eastern-most tip of the existing system in West Virginia, about 200 miles to a connection with Transcontinental Gas Pipe Line in Rockingham, NC.

"This fast-growing Mid-Atlantic region continues to enjoy significant economic expansion," said Dominion CEO Thos. E. Capps. "All of the regional demand projections point to a need for substantial improvements in our energy delivery infrastructure. This project will help meet this need economically."

The greenfield pipe would be designed to transport up to 600,000 Dth/d of Appalachian, Canadian and Gulf Coast gas production to markets in the Mid-Atlantic and Southeast regions starting in June 2005.

"Independence and Millennium are going to serve the Northeast market. Maritimes is bringing Sable Island gas to serve [New England]. There probably are a number of other projects being proposed for the Northeast, but this is a southeastern project and there's only one pipeline currently serving that whole region right now," said Joe Kienle, director of business development for Dominion Transmission.

The Greenbrier project is a competitive alternative to Transcontinental Gas Pipeline's proposed Momentum project, another of Transco's many mainline expansion proposals. Transco recently concluded an open season on Momentum, which would add firm capacity from Station 65 in Louisiana to Station 165 in Virginia. The project is anticipated to be in service by May 1, 2003. The company is expecting between 250,000 and 700,000 Dth/d of demand.

"I think a lot of people who use energy would like to have alternate suppliers if they could --- if anything, for reliability," said Kienle. "There also could be a limit on the other pipe as to how much more they can expand and still be competitive. How much more looping and compression can they add to that system without having to build a new line? There's a lot of activity along that pipeline. There's a big question about whether Transco can meet it all. That's what the potential customers that I've talked to have concerns about."

Transco's Gary Lauderdale, senior vice president and general manager, said his pipeline will have no major difficulties meeting expected demand growth. Lauderdale said market interest for the Momentum project has been "very significant."

He also noted that it's actually much more economic to add looping and compression to an existing line than to build a new greenfield pipeline. "It's always more economic to loop an existing line particularly now with the fact that it's more difficult to build greenfield projects because of the more complicated certificate process from an environmental and landowner standpoint. The existing right of way has a real premium value to it."

10,000 MW Planned

Both projects are targeting about 10,000 MW of new gas-fired power generation that is planned to be built in Virginia and North Carolina by 2007, which roughly amounts to about 1.8 Bcf/d of incremental growth.

"If even part of that is built, our project is still needed," said Kienle. "The Transco project is scheduled for 2003. We are looking toward the 2005 market, [so both could be built]," he added. Lauderdale disagreed. "If Momentum is built in 2003, there probably won't be any market left for another project."

But Kienle believes Greenbrier may have the upper hand because in addition to creating pipeline competition for the first time in the region, it will bring much needed access to storage. Dominion Transmission operates one of the largest gas storage complexes in the country. "That's quite different from the other mainline project [Transco's], which is just bringing Gulf production north," he said,

"We also have a different fuel supply diversity. We have access to Appalachian production, but also to Canadian gas. Over the years we've increased our access to Canadian gas through our Lysander interconnect with the Empire Pipeline in New York. Last year we put a new connection in that adds about 100,000 Dth/d. On top of that we already had out of the Canajoharie interconnect with Iroquois and our Niagara import point."

Lauderdale said Transco also has a diverse supply mix, which includes Canadian and Appalachian production through the Leidy Hub, storage gas mainly leased from Dominion and its recently acquired Cove Point LNG facility in Maryland.

Dominion is holding an open season Oct. 5-Dec. 5 to test market interest in the Greenbrier project.

Rocco Canonica

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