Parties have asked FERC to approve a settlement that would clear the way for the sale of a liquefied natural gas (LNG) storage facility and pipeline by Uzal LLC to Paiute Pipeline Co. for an estimated $22 million.

The facilities include an LNG storage plant located near Lovelock, NV, and a 61-mile, 20-inch diameter pipeline, which loops Paiute’s mainline between the LNG storage facility at a point near Wadsworth, NV. Currently, Paiute’s parent, Southwest Gas Corp., leases the facilities from Uzal, and Paiute operates them as part of its interstate pipeline system.

Paiute, Uzal and other parties have asked the Federal Energy Regulatory Commission to act quickly. They noted that the settlement requires the sale to close on or before Dec. 31 of this year.

The terms of the settlement would:

In a related development, Tuscarora last Thursday asked the Commission to withdraw an application for its later 2005 proposed expansion, contingent on the agency’s approval of the settlement. The project was intended to provide additional firm transportation of natural gas to Southwest Gas for its northern Nevada and northern California operations.

“Instead of receiving service from Tuscarora, Tuscarora’s 2005 Expansion Project customers [now] will receive LNG peaking service from Paiute through existing facilities that Paiute will be acquiring from Uzal,” the pipeline told FERC.

Following the expected sale of the LNG and pipe facilities to Paiute, Uzal will pay Tuscarora $1.88 million to satisfy the obligations of Tuscarora’s 2005 Expansion Project shippers under their precedent agreements, according to the agreement. In addition, Uzal said it will withdraw its petition for court review of FERC orders approving Tuscarora’s 2002 Expansion Project.

Under the settlement, Avista, Sierra Pacific Power and Southwest Gas will be responsible to Tuscarora for incremental costs incurred with respect to the 2005 expansion project.

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