After pending at FERC for five long years, El Paso Corp’s ANR Pipeline told the Commission last week that it was calling it quits with the troubled Independence Pipeline and companion SupplyLink projects, which had been conceived and designed to bring cheap Canadian natural gas from the Midwest to East Coast markets.

“ANR just did not have the market support for the projects, and we’re not going to be moving forward with them.” said El Paso spokesman Mel Scott. The 400-mile, 36-inch diameter Independence appeared to haven been doomed from the very start — confronted with heated opposition from landowners in Ohio and Pennsylvania, and with fickle shippers pulling out of their agreements for transportation capacity on the proposed line.

The Commission awarded certificates to the two Midwest-to-East Coast projects in July 2000. It gave the sponsors three years to build Independence, and two years to build SupplyLink. The SupplyLink line, a 73-mile looping of ANR’s existing system, and Independence were to ship eastward about 1 Bcf/d of natural gas that was flowing into the Midwest over Alliance Pipeline and Northern Border Pipeline.

The projects, however, had been caught up in a regulatory maze since being filed in March 1997, with state officials, congressional lawmakers and FERC — in addition to landowners — questioning whether there was enough market support to justify them.

ANR was the sole sponsor of SupplyLink, and lead partner in Independence. Other Independence sponsors were Transcontinental Gas Pipe Line and National Fuel Gas Co. Buffalo, NY-based National Fuel said last week that it was writing off its $15 million investment in Independence as a non-cash charge against its second-quarter earnings. The company said this would reduce its after-tax earnings for the quarter by 12 cents per diluted share.

“We regret that utility companies, electric generators and gas marketers have been unable or unwilling to commit to long-term transportation agreements on Independence,” said Dennis J. Seeley, president of National Fuel Gas Supply Corp., the pipeline and storage subsidiary of National Fuel.

“We continue to believe that the Northeast will require substantial additional gas infrastructure in the near future, and will continue to attempt to service that need through our proposed Northwinds Project,” a proposed 215-mile, 30-inch diameter pipeline that is designed to move 500 MMcf/d of gas supplies from Dawn, ON, to Leidy, PA.

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