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Palmetto Pipeline Declares Open Season

Palmetto Pipeline Declares Open Season

The Palmetto Pipeline, a proposed joint venture between Carolina Power & Light (CP&L) and Sonat, announced an open season Monday seeking interest from potential firm gas transportation service customers for terms of at least 20 years. The open season began April 1 and will continue through May 31.

CP&L plans to subscribe for a substantial portion of Palmetto's 200 MMcf/d to 300 MMcf/d capacity to fuel new electric generation being developed in the Carolinas, with the remainder to be used to increase regional gas availability. CP&L said it plans to build 4,000 MW of gas-fueled generation in the Carolinas by 2007. It also is in 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 in Aiken, SC, to an interconnect with NCNG in Roberson, NC, has Phase II and Phase III expansions planned for April 2003 and April 2004, respectively, with the ultimate goal of increasing capacity up to the amount subscribed.

Sonat said it would expand its pipeline system to accommodate Palmetto's growth in the form of additional pipeline looping and compression. The extent of the Sonat's expansion will be determined by its ongoing open season, which is being held between the same dates as the Palmetto open season.

"If Palmetto signs up 300 MMcf/d worth of capacity, then Sonat will have to expand by that much because Aiken, SC, is Sonat's terminus and Palmetto's origination," said Mark Limbaugh, director of Sonat's market development. "But it is very early on in this process. There are so many issues to clear up and we don't plan to file anything with FERC until this coming December."

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

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

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