Maine Natural Gas (MNG), which has seen its plans to build an 80-mile-long natural gas pipeline to the state capital and the surrounding Kennebec Valley hampered by a competitor's challenge, has signed a 10-year agreement to supply gas to a new regional hospital in Augusta. It's a deal that could help MNG build the pipeline even if the state isn't a customer.

MaineGeneral Medical Center (MGMC) expects to use about 100,000 Dth annually at a hospital it is building in Augusta and at its Thayer Campus in Waterville, ME, according to a report in the Kennebec Journal. The facility is scheduled to open late next year. MNG's deal with MGMC starts on Nov. 1, 2013, MNG spokesman Dan Hucko told NGI Tuesday. The rate MGMC is paying for the gas was not disclosed.

"The agreement was based on guaranteed minimum volumes of natural gas consumption by the hospital and is of a sufficient value (along with some other key agreements we have) as to make building the pipeline to Augusta a financially viable proposition for MNG even without a state contract," Hucko said.

A legal battle over MNG's proposal to build the Kennebec Valley pipeline took another turn with a lawsuit filed recently by MNG, which claims Summit Natural Gas of Maine Inc.'s previously successful challenge to the project was filed too late (see Daily GPI, Oct. 18).

MNG, a company affiliated with Central Maine Power Co. parent company Spain-based Iberdrola USA, is asking the court remand the case back to Maine's Bureau of General Services (BGS), reinstate BGS's selection of MNG to build the pipeline system in the Augusta area, or vacate a decision by a special state appeal panel that invalidated BGS's selection.

In June state officials selected MNG to build the pipeline system. The decision was appealed by Colorado-based Summit, which is in the process of acquiring Kennebec Valley Gas. Summit objected in part because it said its pipeline would create more jobs and serve more communities (see Daily GPI, Aug. 23).

A special state appeal panel subsequently invalidated the BGS selection, saying Summit had established "that the awarding of the contract to provide natural gas service to the Augusta/Gardiner area to MNG was in violation of law, contained irregularities that created a fundamental unfairness, and was arbitrary or capricious" (see Daily GPI, Sept. 17). At the time, MNG said it had been informed by BGS that the RFP had been invalidated and no binding award would be made.

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