The Palmetto Pipeline, a proposed joint venture between CarolinaPower & Light (CP&L) and Sonat, announced an open seasonMonday seeking interest from potential firm gas transportationservice customers for terms of at least 20 years. The open seasonbegan April 1 and will continue through May 31.

CP&L plans to subscribe for a substantial portion of Palmetto’s200 MMcf/d to 300 MMcf/d capacity to fuel new electric generationbeing developed in the Carolinas, with the remainder to be used toincrease regional gas availability. CP&L said it plans to build4,000 MW of gas-fueled generation in the Carolinas by 2007. It also isin the process of buying LDC North Carolina Natural Gas (NCNG) for$354 million (see Daily GPI Nov. 12,1998). Palmetto also would serve some of the gas needs of NCNG.

The proposed pipeline, which would run from Sonat’s system inAiken, SC, to an interconnect with NCNG in Roberson, NC, has PhaseII and Phase III expansions planned for April 2003 and April 2004,respectively, with the ultimate goal of increasing capacity up tothe amount subscribed.

Sonat said it would expand its pipeline system to accommodatePalmetto’s growth in the form of additional pipeline looping andcompression. The extent of the Sonat’s expansion will be determinedby its ongoing open season, which is being held between the samedates as the Palmetto open season.

“If Palmetto signs up 300 MMcf/d worth of capacity, then Sonatwill have to expand by that much because Aiken, SC, is Sonat’sterminus and Palmetto’s origination,” said Mark Limbaugh, directorof Sonat’s market development. “But it is very early on in thisprocess. There are so many issues to clear up and we don’t plan tofile anything with FERC until this coming December.”

Palmetto is holding this test of potential interest despite thedisapproval of two main competitors, Williams Transco and Scana See Daily GPI, March 4). Neither company couldbe reached before press time, but each had said it planned to fileobjections with FERC.

Both the Sonat expansion and the Palmetto project still needFERC and state approval. Construction is also subject to theexecution of a definitive agreement between Sonat and CP&L.

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