Seminole Energy Services LLC has announced that it plans to seek regulatory approval to build a 150-mile natural gas pipeline to serve the growing ethanol market in Central Nebraska.
The Tulsa, OK-based energy company said it is not sure whether the project will require the approval of the Federal Energy Regulatory Commission or the Nebraska Public Service Commission. "A representative of Seminole is in Washington today [meeting with FERC] to determine that," said spokeswoman Andrea Dahlke Thursday. FERC will likely make the decision on jurisdiction, she noted.
The proposed pipeline, which will connect with Kinder Morgan's 436-mile Trailblazer Pipeline, will be anchored by long-term, firm transportation commitments from Aquila Inc. and a number of new and expanding ethanol facilities in the state, according to Seminole Energy. Aquila is the only potential shipper that has signed on at this point, Dahlke said. Company affiliate Nebraska Resources Co. LLC (NRC) will submit the application for the project, which is targeted for start-up in spring 2009.
Seminole Energy hopes to hold a 30-day open season beginning in mid-May, she said. But Dahlke noted the timing will ultimately hinge on which regulatory body has purview over the project. The company has committed to having preliminary information on the proposed pipeline on its website in the next few weeks. The project cost and capacity will depend on the outcome of the open season, she noted.
The pipeline would extend from east of Hastings, NE, to Columbus, NE, in the central part of the state, near Omaha. The maximum diameter of the line would be 16 inches.
"Seminole and NRC have worked diligently with Aquila and several ethanol industry participants to develop a natural gas pipeline alternative that would bring more competition to this area of Nebraska," said Dan Frey, Seminole vice president of business development. "We are very encouraged by the interest and support that we have received not just from Aquila, but from the other parties involved in the development of new and expanding ethanol facilities" in the state.
Seminole Energy believes the economics are right for the pipeline now, Dahlke said, pointing to the number of ethanol plants being built in Nebraska, the abundance of corn feedstock in the state to produce ethanol and significant natural gas resources.
There is "strong ethanol potential in that state," she told NGI.
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