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CNG Flip-Flops on Capacity Needs, Other Pipe Projects Say

CNG Flip-Flops on Capacity Needs, Other Pipe Projects Say

The Independence Pipeline and Millennium Pipeline projects contend CNG Transmission Corp. is speaking with a forked tongue when it comes to the need for new pipeline capacity to supply the growth in gas demand that's expected for the Northeast market.

On one hand, CNG claims no market exists to support the competing Northeast-bound Independence and Millennium projects, but it did an about-face last week when it announced a joint venture with Tennessee Gas Pipeline to transport 750,000 Dth/d of gas from Chicago and the Niagara Import Point to markets in New York, Pennsylvania and New England, the two projects pointed out [CP97-315 et al].

But CNG, which views its proposal as a response to the Independence and Millennium greenfield projects, said the joint venture-the Atlantic Alliance Project-doesn't signal a departure from its previous views on Northeast market growth. "In fact, this project represents a reasonable way to accommodate market growth, while encouraging the efficient use of the existing pipeline grid," it told FERC. CNG added the project would involve "construction of a relatively small amount of new pipeline facilities."

Independence contends CNG has stooped to using "delaying tactics," such as criticizing FERC's environmental analysis of the 1 Bcf/d Independence, in order to give its Atlantic Alliance Project time to "catch up." Independence, which was first announced in 1997, urged FERC "not to countenance" such conduct by CNG.

Millennium officials also accused CNG of similar tactics, and added that its recently announced Atlantic Alliance Project shows that CNG has flip-flopped on its previous claim that no new capacity would be immediately needed for the Northeast. The Atlantic Alliance "plans make it clear that CNG does not agree with the testimony it.....presented to the Commission [at the Northeast conference in June], and that the testimony was only filed as part of a regulatory strategy designed to delay the Millennium project," said David C. Pentzien, chairman of the Millennium Pipeline Management Co.

CNG, as well as Texas Eastern Transmission (Tetco), has asked the Commission to suspend further action on Independence while FERC staff considers alternatives to the project, including ones that they have proposed. They insist staff's draft environmental impact statement (DEIS) analysis of the Independence and the related MarketLink projects was "deficient" and "useless" because it failed to review all viable alternatives. Tetco has gone a "step further" and has asked FERC to hold another conference to assess various project alternatives. Tetco and CNG-which have a dominant grip on the Northeast market-insist their proposed alternatives could eliminate much of the need for the 624-mile Independence project and possibly the MarketLink expansion. CNG also sees its alternative as a substitute for Columbia Gas Transmission's New York-bound Millennium project. Their alternatives incorporate the use of existing and potential turned-back capacity on their systems.

But Independence noted "for sufficient turnback capacity to be available to meet the firm needs for Independence/MarketLink markets, substantial existing market demand that is currently being served by that capacity would have to disappear..... Independence does not believe this is a realistic assumption." And "if Tetco's and CNG's assumptions are incorrect with respect to the availability of turnback capacity, even more facilities would be required to be constructed and possibly even more delay" would occur, argued Independence, whose sponsors include ANR Pipeline, National Fuel Gas Supply and Transco. The Commission "should not delay the Independence proceeding because two pipeline competitors have presented incomplete, speculative and unfiled 'alternatives' at the eleventh hour," Independence said.

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ISSN © 2577-9877 | ISSN © 1532-1231
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