FERC last week granted certificates, subject to conditions, toCentral New York Oil and Gas Co. (CNYOG) to proceed with theconstruction of its Stagecoach storage project and to Tennessee GasPipeline to build a lateral connecting its system with the storagefacility.

The certificate gives CNYOG the go-head to develop itsStagecoach Storage Field Project at an existing gas-producing fieldlocated in Tioga County, NY, and Bradford County, PA. The storageproject will have an initial working gas capacity ranging from 11.9Bcf to 13.6 Bcf, and will be capable of supporting withdrawals ofup to 500 MMcf/d and injections of up to 250 MMcf/d. The maximumstorage inventory in the Stagecoach Storage Field cannot exceed16.75 Bcf without prior Commission authorization, according to thecertificate.

eCORP Marketing LLC bid $22.13 million for the entire capacityof the storage field, and has signed a binding 20-year precedentagreement with CNYOG. CNYOG said it is negotiating with eCORP totake a smaller share of the capacity of the Stagecoach storageproject so that others can use it.

FERC approved CNYOG’s request for market-based rates for firmand interruptible storage services provided by the Stagecoachproject. However, it said the rates were subject to re-examinationin the event CNYOG expands its storage capacity beyond the amountauthorized by the Commission or acquires new facilities.

In granting market-based rates, FERC said CNYOG’s share of thestorage market in the Pennsylvania and New York region, whichcurrently is dominated by CNG and National Fuel, would be small. Itestimated CNYOG, as a new market entrant, would have a 2.8% shareof the working gas capacity and 4.3% of the peak-day deliverabilitycapacity.

In the same order, the Commission also gave a thumbs-up toTennessee to construct its companion project – a 23.7-mile, 30-inchdiameter lateral line that would connect to its 300-Line. Theso-called Stagecoach Lateral will provide up to 500 MDth/d of firmtransportation from the storage field to the 300-Line.Additionally, Tennessee will expand capacity on its 300-Line by 100MDth/d to accommodate the deliveries from the storage field to theNortheast market. The estimated cost of the lateral and 300-Lineexpansion was pegged at $81.3 million.

Tennessee reported it has signed a binding 10-year precedentagreement with eCORP for 400 MDth/d of the firm transportationservice on the lateral and for 90 MDth/d of firm service on the300-Line.

FERC directed Tennessee to execute firm contracts for amountsequal to those in its precedent agreements before it can beginconstruction of the proposed lateral. It further allotted bothTennessee and CNYOG one year to complete the construction of theirprojects.

Susan Parker

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