FERC Wednesday issued Northern Natural Gas Co. a certificate to expand its pipeline system to meet the growing natural gas demand of ethanol producers in several Midwest states.

The so-called Palmyra North Expansion, which is the second project within the larger, ongoing Northern Lights Expansion project, would increase the capacity of Northern Natural's West Leg pipeline segment of its market-area facilities. Specifically, the project seeks to add new meter stations in South Dakota and Iowa; build new pipe in Dickinson County, IA; add a new 4,083 hp turbine at Northern's existing Palmyra compression station in Otoe County, NE; and abandon a compressor unit and associated facilities at the pipeline's Clifton compressor station in Clay County, KS, and relocate a portion of the facilities at the Palmyra compression station.

The proposed facilities and modifications would serve new and existing ethanol production plants, according to Northern Natural, a pipeline subsidiary of MidAmerican Energy of Des Moines, IA. It said the project promotes the alternative energy objectives spelled out in the Energy Policy Act of 2005.

Six market-area customers -- LSCP LLLP, Millennium Ethanol LLC, Cargill Inc., Superior Ethanol LLC, Verasun Hartley LLC and Siouxland Energy & Livestock Cooperative Ethanol Plant -- have entered into precedent agreements for a total of 44,200 Dth/d of capacity to be created by the expansion, Northern Natural said. Service to the customers is scheduled to begin Nov. 1.

The Federal Energy Regulatory Commission granted Northern Natural's request for a predetermination supporting rolled-in rate treatment for the costs of the expansion and abandonment proposal in its next Section 4 rate case, absent a significant change in circumstances in the intervening period. The cost of the expansion was pegged at approximately $9 million.

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