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Empire State Seeks FERC Go-Ahead to Connect Its System to Millennium Pipe Project

National Fuel Gas Company's Empire State Pipeline last Wednesday filed an application with FERC seeking the go-ahead to build and operate the Empire Connector Project that would link its pipeline system with the Millennium Phase I Pipeline project in Upstate New York.

Millennium, which has been stalled for years, asked FERC in August to amend its 2002 certificate so it can build its pipeline in two sections (see NGI, Aug. 8).

Empire State Pipeline proposes to build a 78-mile, 24-inch diameter connector line to tie its 24-inch diameter system, which originates at the United States-Canada border near Buffalo, NY and extends easterly 157 miles to near Syracuse, NY, to the proposed Millennium Pipeline near Corning, NY. The Empire Connector Project would transport approximately 250,000 Dth/d of natural gas and would provide customers with access to supplies at the Dawn Hub through Empire State Pipeline's connection with TransCanada PipeLine system at the Chippawa Channel of the Niagara River.

Empire State has called on the Federal Energy Regulatory Commission to approve its project application by the spring of 2006. It anticipates the $144 million connector line would be in service by the fall of 2007.

KeySpan Gas East Corp., a subsidiary of KeySpan Energy Corp., has signed up for at least 150 MMcf/d of gas transportation service through the Empire State Pipeline and Millennium Pipeline systems, the National Fuel's pipeline said. KeySpan Energy, along with NiSource Inc. and DTE Energy jointly sponsor the Millennium project.

"The Empire Connector Project will provide a necessary and important alternative for providing natural gas supplies to customers in New York State," said National Fuel Chairman Philip C. Ackerman. "Recent catastrophic weather events and record-setting natural gas commodity prices have emphasized the need for diversification of natural gas supply options in order to ensure that reliable supplies of natural gas will be available to meet our nation's energy needs."

The Empire Connector Project appears to hinge on the Millennium Phase I Pipeline Project receiving clearance from FERC and New York State. The original Millennium project, a 442-mile, 700 MMcf/d pipeline, was approved by FERC in September 2002, but then was blocked from crossing the Hudson River by New York State on the grounds that it was inconsistent with the state's authority under the Coastal Zone Management Act (CZMA). The project was declared dead in the water when former Commerce Department Secretary Donald Evans upheld New York Sate's position in a December 2003 ruling.

Millennium, which is seeking to overturn the Commerce Department's ruling in court, dusted off its plans for the pipeline in February 2004, dividing it into two phases. In August of this year, Millennium sought an amendment to its 2002 FERC certificate for the two-phased construction. Major Northeast utilities Consolidated Edison and KeySpan would be anchor shippers on Phase 1, which would be a 182-mile section from Corning, NY, to Ramapo, NY, just short of the Hudson. Phase II would take the line into the New York City metropolitan area.

Assuming a favorable decision from FERC and no objection from New York State, Millennium said it expects Phase I the project to be in service by Nov. 1, 2007.

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