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Tennessee Cleared to Export Marcellus Gas over Border Facilities

Tennessee Gas Pipeline received regulatory approval Monday to use its facilities to export Marcellus Shale gas through its facilities at the U.S.-Canada border.

The Federal Energy Regulatory Commission action makes Tennessee's 20-inch diameter Niagara Spur Line and its jointly owned 30-inch diameter Niagara Spur Loop Line, which connect with the facilities of TransCanada PipeLines Ltd. near Niagara Falls, NY, bidirectional -- capable of exporting gas to Canada from the U.S. and importing gas from Canada to the U.S [CP11-22]. The new northbound pipeline capacity to Canada would be approximately 548 MMcf/d, according to a spokesman for El Paso Corp., parent of Tennessee. The loop line is owned by Tennessee, National Fuel Gas Supply Corp. and Dominion Transmission Inc.

"We find that granting the applicant's request for authority to use its existing border facilities for the export, as well as the import, of natural gas will promote national economic policy by reducing barriers to foreign trade and stimulating the flow of goods and services between the United States and Canada, both of which are signatories to the North American Free Trade Agreement," the FERC order said.

In a related filing at FERC Monday, National Fuel submitted an application to build its Northern Access Project, which would allow it to transport 320,000 Dth/d of Marcellus Shale production in Pennsylvania from an existing interconnection with Tennessee at its existing Ellisburg Compressor Station in Potter County, PA (Rose Lake Interconnection), to the facilities of TransCanada at Niagara [CP11-128]. The project is targeted for in-service by Sept. 1, 2012.

"The proposed facilities will permit National Fuel to receive up to 320,000 Dth/d from Tennessee at the Rose Lake Interconnection and transport that gas to TransCanada at Niagara," National Fuel told the Commission. As a result of an open season held in early 2010, Statoil has signed a precedent agreement for 100% of the capacity with a primary term of 20 years.

National Fuel's provision of service hinges on "the completion of modifications to the jointly owned Niagara Spur Loop facilities to permit the bidirectional flow of gas," National Fuel said. "National Fuel and Tennessee propose to modify and upgrade certain jointly owned compression facilities on the jointly owned [loop line] facilities so that [they] can be operated bidirectionally." The proposed modifications will be the "subject of a concurrent application" to be filed by Tennessee this week, National Fuel said.

The National Fuel project calls for the construction of a new compressor station totaling approximately 4,740 hp in Erie County, NY, adjacent to an existing gas measurement, regulation and odorization facility operated by both National Fuel and Tennessee; piping changes at the Concord Compressor Station in Erie County to permit bidirectional flow; and the installation of two additional compressor units at the existing Ellisburg Compressor Station totaling approximately 9,470 hp.

In addition, National Fuel said it plans to acquire certain of Tennessee's existing Rose Lake Interconnection metering facilities and seeks to upgrade the facilities to meet the new capacity requirements.

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