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Southern Natural Begins Open Season for Pipeline Service From Elba Island LNG

Southern Natural Gas Co. is holding a binding open season through Jan. 12 to solicit bids from the Elba Island liquefied natural gas (LNG) terminal near Savannah, GA to delivery points in all zones of its system. In addition, bidders may request to match a shipper with firm seasonal summer capacity up to 45,000 Dth/d of firm seasonal winter capacity for a multi-year, seven-month winter period (Oct.-April) on its proposed Cypress pipeline for deliveries into South Georgia, Brunswick, GA or Jacksonville, FL markets.

Capacity is available now, except for capacity on the Cypress pipeline, which is expected to be in service around May 1, 2007. The Federal Energy Regulatory Agency issued a favorable preliminary determination for the El Paso Corp. subsidiary's Cypress project last month (see Daily GPI, Nov. 28). The project, which has been on the drawing board since 2000, is expected to open up a direct corridor for deliveries of LNG from Elba Island to northern Florida markets.

Southern said bids from the open season will be awarded on the basis of net present value (NPV) determined with reference to the rate, volume and term the date the service is to begin and the cost of service to Southern of any related facilities, if applicable. There is a prearranged bidder for capacity from the Elba receipt point.

In calculating the NPV, Southern will take into account the proposed in-service date set forth in the bid, and bids for capacity on the Cypress pipeline will be assumed to begin May 1, 2007. Except for bids on the Cypress pipeline, Southern will not accept bids for multi-year seasonal or sculpted service. Southern will use a discounted cash flow factor of 10.24%, and it will have the right to aggregate bids that generate the highest net present value to Southern.

For a request form or additional information, contact Condi Hosey at (205) 325-3899; by fax at (205) 326-2038; or by e-mail at condi.hosey@elpaso.com.

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