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
"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
"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
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
"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,"
"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.