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Sale of Tennessee's Stagecoach Lateral to CNYOG Gets FERC Nod

FERC Thursday gave Tennessee Gas Pipeline the go-ahead to sell its lateral serving the Stagecoach Storage facility in southwestern New York State to Central New York Oil & Gas Co. (CNYOG), owner and operator of the storage site, for an estimated $35.5 million.

The 23.7-mile, 30-inch diameter lateral extends northward from an interconnection with Tennessee's mainline system (300-Line) in Bradford County, PA, to CNYOG's Stagecoach storage field in Tioga County, NY. Tennessee placed the lateral in service in January 2002, and has provided firm and interruptible transportation service on the lateral on behalf of customers using CNYOG's Stagecoach storage facility. The lateral currently provides the only transportation service to the storage site.

"There will be no impact on existing customers or pipelines" as a result of the transaction, the FERC order said [CP07-13, CP07-15]. "All of Tennessee's shippers who have service on the Stagecoach Lateral are customers of CNYOG and CNYOG has executed precedent agreements covering 100% of the transportation capacity under contract on the Stagecoach Lateral," it noted.

Upon closing of the sale CNYOG, a subsidiary of Kansas City, MO-based Inergy LP, said it intends to rename the lateral the South Lateral.

In a related development, FERC recently gave CNYOG the green light to open storage wells associated with the Phase II expansion of its Stagecoach Storage facility in New York State and to begin service on a new pipeline.

The agency order allows Stagecoach to begin operating a six-mile, 20-inch diameter mainline and three storage wells that are part of the expansion, but it does not authorize service on a nine-mile, 24-inch diameter North Lateral that would connect the storage facility with the proposed Millennium Pipeline [CP06-64].

The Stagecoach storage facility is located 150 miles northwest of New York City. The Phase II expansion, when completely operable, will bring the facility's working gas capacity to 26.25 Bcf from 13.25 Bcf. Total storage capacity will rise to 30.25 Bcf. Injection capacity and deliverability will be unchanged at 250 MMcf/d and 500 MMcf/d, respectively. However, the expansion will extend the field's capability to maintain withdrawals at maximum rates to about 20 consecutive days from the existing level of 12 days.

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