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FERC Urged to Act Quickly on Millennium Marcellus Project

Southwestern Energy Services Co. (SESC), an anchor shipper on a Millennium Pipeline expansion project that will transport Marcellus Shale gas, has urged FERC to approve the mostly compression expansion of Millennium by Feb. 1 so that it can be in operation by Nov. 1, delivering additional supplies to Northeast and New England markets.

"The 2012 in-service date is essential to keep pace with the continuing development of SESC's affiliated natural gas production and was a critical component of SESC's negotiations with Millennium," said SESC, which markets the production of affiliate Southwestern Energy Production Co., a developer of significant reserves in the Marcellus Shale Basin.

Millennium proposes to build a 12,260 hp compressor station (the Minisink Compressor Project) and associated facilities in Orange County, NY, and has asked the Federal Energy Regulatory Commission (FERC) to issue a certificate for the $44 million project by Feb. 1 so it can be in service by the next winter heating season. The facilities will enable Millennium to boost firm deliveries to its interconnection with Algonquin Gas Transmission LLC at Ramapo, NY, to approximately 675,000 Dth/d.

However, Commission staff last month requested comments on an alternative compressor station site -- the Wagoner/Neversink Alternative, which would involve the construction of a smaller 5,100 hp compressor station at a site adjacent to Millennium's existing Wagoner Meter Station facility in Sparrowbush, NY, and would require the replacement of pipeline facilities. Staff requested landowner comments by Jan. 23 to assist it with its environmental analysis of the alternative.

SESC is concerned that the new project alternative may throw a wrench into the certificate proceedings at FERC.

Houston-based SESC, which has entered into a precedent agreement for up to 100,000 Dth/d for a 10-year term for the project's capacity, "is extremely concerned that the deadline for comments regarding the alternative will delay the issuance of the EA [environmental analysis], resulting in a delay in the issuance of the requested approvals beyond Feb. 1, and jeopardizing the anticipated in-service date of Nov. 1 for the project," it said.

"SESC also believes that, in the original application and subsequent responses to data requests issued by FERC staff, Millennium has demonstrated that its proposed Minisink Compressor Station is the best alternative for providing the service constructed for by SESC and other shippers.

"SESC strongly supports the application of Millennium for the Minisink Compressor Project and the requested in-service date for the project. SESC and other shippers have a pressing need for this capacity to be available by the scheduled date to enable their increasing volumes of natural gas production [from the Marcellus] to reach markets. SESC's production affiliate and others have made major investments in the exploration and development of natural gas production, including reserves that can be served by the project."

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