FERC last Thursday denied a request for a stay of its November 2007 order approving Transwestern Pipeline's proposal to extend its pipeline system 260 miles from its mainline in Yavapai County, AZ, to delivery points in the growing Phoenix market (see NGI, Nov. 19, 2007).

In December the Town of Buckeye, AZ, and other parties asked the Federal Energy Regulatory Commission to stay all actions related to the construction of pipeline facilities through the town in southwestern Arizona. The so-called "Buckeye Interests" said they did not oppose any actions that involved non-Buckeye portions of the project.

"We find that while Buckeye Interests and affected landowners will incur financial costs and practical inconveniences, these do not constitute irreparable injury; further, we find that on balance, the public interest lies in the timely completion of the Phoenix Lateral along the approved route through Buckeye," the FERC order said in denying the stay plea [CP06-459, CP07-9].

"We find the record contains a more than adequate showing of need, as evidenced by the fact that Transwestern 1) will assume the financial risk of the new facilities (thereby insulating its existing customers from any underrecovery of expansion costs) and 2) has submitted precedent agreements for firm service for 370,000 Dth/d, with 345,000 Dth/d committed for a 15-year term, representing 74% of the capacity of the Phoenix Lateral and 99% of the capacity of the San Juan Loops," the order noted.

"We found no other energy project proposals capable of serving as viable alternatives to the Phoenix Expansion Project."

The Phoenix expansion project will deliver 500 MMcf/d of gas to the Phoenix area, which currently is served only by competitor El Paso Natural Gas. It will provide Arizona utilities access to more San Juan Basin gas production and give Transwestern's existing shippers, many of whom are marketers and producers, access to additional markets for natural gas.

The project calls for the construction of approximately 25 miles of 36-inch diameter pipeline looping of Transwestern's existing mainline in San Juan and McKinley counties, NM; and about 95 miles of 42-inch diameter pipeline and 164 miles of 36-inch diameter pipeline (the Phoenix Lateral) extending from its existing mainline near Ash Fork, AZ, to El Paso's East Valley Lateral in Coolidge, AZ. The proposed Phoenix Lateral is the portion of the project that would run through the Town of Buckeye.

As part of the project, FERC in November approved Transwestern's request to purchase a 70% interest in the East Valley Lateral, which continues 36 miles and terminates just south of Phoenix. The transaction gives Transwestern 242,500 Dth/d of the East Valley Lateral's capacity and leaves about 100,000 Dth/d for El Paso.

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