Gulfstream Promises to Change 'Tenor' of FL Gas Market
With the introduction of the Gulfstream Natural Gas System pipeline in mid-2002, the whole "tenor of the gas market" in the Sunshine State will undergo structural and financial changes, said a Gulfstream executive last week.
The most obvious contribution of the 1 Bcf/d-plus pipeline will be the marked increase in firm transportation capacity and gas supplies to Florida, a market that has long been dominated by only one interstate pipeline -- Florida Gas Transmission (FGT), said Guy Buckley, Gulfstream's senior vice president and general manager, at NGI's GasMart/Power 2001 in Tampa, FL.
"Florida is frequently gas short [and capacity constrained]. That's going to turn around." He estimated that Gulfstream will add 40% more interstate pipeline capacity to the Florida market when it begins service on June 1, 2002.
Florida will see the emergence of capacity trading after the start-up of Gulfstream, Buckley said. "People are going to be able to hold capacity and trade it in the Florida market. That's going to allow the development of financial markets for trading gas in [the state]. That whole thing is going to allow more of the gas industry to come into Florida.
"If you take a look at what is traded in the secondary market in Florida now, only one major national [energy] company is in Florida. All the others are not present. Part of that is [because] it's very hard to get capacity" into the state, he noted.
Buckley further noted there will be changes in the way gas is nominated and scheduled on Gulfstream. "We are developing state-of-the-art nominations/scheduling systems [that] basically will allow people to do continuous nominations...It's not going to be stuck in GISB's four-hour cycle," he told the gathering of gas and power executives.
"We're really trying to take this to the next level. How does a generator need to run and dispatch their plant? Forget about the regulatory rigamarole. How do you get a market solution that makes that work?"
Gulfstream sponsors Duke Energy and Williams expect to begin constructing the half-land, half-sea 744-mile pipeline around June 1, Buckley said. Construction on the subsea portion, which will extend from Mobile Bay, AL, under the Gulf of Mexico to near Tampa, will start around Aug. 1, he noted. At a rate of 500 joints being laid each day, he estimated that the subsea portion should be completed in about five months.
When completed, Gulfstream will have six receipt points in Mobile Bay and 20 delivery points in Florida. "It really lays out nicely... It was routed to try to get at the best energy centers," Buckley noted. The pipeline most likely will interconnect with competitor FGT. "I think that we have no problem with that. I think we've had some preliminary discussions" about it already.
At this stage, "we basically have all the major contracts for our facilities...We're writing checks like crazy right now," Buckley said.
He noted that Gulfstream is targeting nearly its entire capacity to serve about 6,000 MWs of the 10,000 MWs that will be required to meet electric demand in the Florida market by 2007. "It's the only pipeline that I know of that's been designed [to serve] the new generation market," Buckley said.
"We're kind of bullish that [the additional generation] is going to be there faster as opposed to slower." Florida is "one of the fastest growing markets in the country. [It] is definitely a gas user, and it can use more gas today," Buckley said. The growth in the state's population and economic rates all bode well for the power and natural gas markets, as well as housing starts, he noted. "Where I live, they're slapping up houses every day."
©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.