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East Tennessee Plans New Lateral to Tap Appalachian Production

Duke Energy's East Tennessee Natural Gas pipeline filed an application with FERC Thursday seeking authorization to build a lateral in southwestern Virginia that would give Appalachian natural gas producers access to more markets.

The 32-mile, 20-inch diameter lateral pipeline would connect the East Tennessee mainline system to CNX Gas Co. LLC's existing Cardinal States Gathering System in southwestern Virginia, which has contracted for 210 MDth/d of the available capacity, a Duke Energy spokeswoman said. The project, to be in service in the summer of 2006, would provide a total of 235 MDth/d of firm transportation capacity that can be later expanded to meet market demand, according to Houston-based Duke Energy Gas Transmission (DEGT).

"The Jewell Ridge Lateral project will provide Appalachian natural gas producers a new outlet for their growing supply to support the growth in Tennessee, Virginia and North Carolina markets," said Guy Buckley, group vice president of DEGT. "Supply through this lateral also will be available to East Coast markets through [East Tennessee Natural gas] to various pipeline interconnects with Texas Eastern, Transco, Tennessee Gas, Columbia Gulf, Midwestern and Sonat pipelines."

The Jewell Ridge project is the latest expansion of the East Tennessee system. In the five years since DEGT acquired East Tennessee, the company has grown its Mid-Atlantic position through system expansion and acquisition.

Last month, DEGT completed the acquisition of natural gas storage and pipeline assets in southwestern Virginia from AGL Resources (see Daily GPI, Aug. 11). The $62 million purchase included the remaining 50% stake in the 2 Bcf Saltville Gas Storage project, a previously developed 1.1 Bcf salt cavern storage field, a 77-mile, 8-inch diameter natural gas pipeline known as the P-25 line and the 1.5 Bcf Early Grove storage field in Washington and Scott counties, VA. The P-25 pipeline stretches from Saltville to Radford, VA, running parallel to East Tennessee.

In 2003 Duke put into service the 95-mile Patriot extension of East Tennessee, which included the addition of about 365,000 Dth/d of firm gas transportation capacity on the pipeline and extended it into North Carolina.

"The Jewell Ridge project, combined with other recent expansions of the [East Tennessee] system, creates an integrated energy hub that provides storage and transportation options for Mid-Atlantic producers," Buckley said.

East Tennessee Natural Gas owns and operates two mainline systems that originate near Nashville, TN, and transport gas in an easterly direction along northern and southeastern Tennessee. At a convergence point near Knoxville, TN, the system extends in a northeastern direction through Tennessee and Virginia, where one leg terminates at Roanoke, VA, and the other at Eden, NC.

The 1,353-mile system has a current design capacity of 1.25 Bcf/d and provides transportation and storage services to local distribution companies and industrial customers in the region.

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