Sonat, Duke Race to Serve Generators in Southeast

Duke Energy Gas Transmission (DEGT) last week announced plans to build a new interstate pipeline to serve the rapidly growing population of new gas-fired generation facilities that are popping up or will pop up in the Southeast region. The so-called Alabama-Georgia Energy System would come out of Mobile Bay, AL, and cross the southeastern states, ending in Georgia. Meanwhile Southern Natural Gas Co. unveiled its intentions last week to expand its system for the third time in the last year to supply incremental demand in Alabama, Georgia and South Carolina.

Citing the Southeastern Electric Reliability Council's projections of a 25% increase in electric demand by 2008, DEGT said its project initially would deliver 250,000-to-500,000 Dth/d of gas to the power plants and industrial load in the region. The new system could be in service as soon as March 2003. DEGT said the facilities would likely consist of 20-inch and 26-inch diameter pipeline and compression originating near the Destin Pipeline gas processing plant in Pascagoula, MS, and interconnecting with the Mobile Bay Processing Partners gas processing plant in Coden, AL, and other pipelines in the area before moving east into Georgia. DEGT noted the project probably would include construction of laterals, where applicable, to reach markets along the path. It is holding a month-long open season to test the market's interest in the new pipeline.

"According to several independent reports, the region served by the Southeastern Electric Reliability Council is in need of significant new generation capacity, and this increased demand is the direct result of unprecedented growth in the region," said Robert B. Evans, DEGT's president. "DEGT is excited about working with the region's power producers and industrial customers in both states to provide the natural gas transportation service to meet this demand growth."

DEGT's open season runs until the close of business on May 31. For more information, contact Dave Weathers at (713) 627-4773.

El Paso spokesman Aaron Woods said customers are already committed to the Sonat expansion, which would involve additional compression and pipeline looping. Southern has entered into binding long-term firm transportation agreements with various shippers for 267 MMcf/d. The company said it is currently preparing an application to submit to FERC, with the hopes of having the expansion in service by June 2003.

"Power generators are stepping up to the plate to build new power plants across the Deep South to meet increasing electricity demand," said Jim Yardley, president of Southern Natural Gas. "They are choosing natural gas to fuel them, and we are able to expand our existing system in a timely manner to meet their requirements."

In addition to the expansion announced last Tuesday, Sonat previously announced two other mainline system expansions (see NGI, April 30). With the company's three expansion projects to increase gas supply to new generators in the Southeast, Southern expects to increase its capacity by 635 MMcf/d during 2002 and 2003 at an estimated capital cost of $350 million. The company also recently reported its intent to construct and operate the $240 million Cypress Pipeline system, which will transport 310 MMcf/d of vaporized LNG to Jacksonville, FL, from a recommissioned import terminal at Elba Island, GA (see NGI, April 30).

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