Diversity of supply sources, a transportation network thatblankets nearly the entire state of Florida and strong customerties will give Florida Gas Transmission (FGT) the edge over newprojects – such as Williams-Transco’s proposed Buccaneer Pipeline- that plan to enter its territory to cash in on the growinggeneration market, says FGT President Rockford G. Meyer.

Buccaneer sponsors are preparing for an open season startingshortly after Jan. 1 for their line, which would travel under theGulf of Mexico to invade FGT’s monopoly turf along Florida’s westcoast. But Meyer isn’t concerned about the competition. “I thinkour pipeline system offers a lot of advantages over a line which isjust coming over the Gulf [and would access] only Gulf supplies,”he said, when asked if he viewed the planned Buccaneer line as acompetitive threat. “Our pipeline accesses not only the offshoreGulf of Mexico supplies, but also supplies from South Texas,Louisiana, Mississippi and Alabama. We access interstate pipelines,intrastate pipelines, plant gas and wellhead gas. That’s a veryvaluable asset to our customers, we think, to have that kind ofdiversity of gas supply, and not just be tied to supplies out inthe Gulf, which can be subject to fairly significant weather.”

Also “because we have the existing pipeline infrastructure,we’re able to expand our system in a very cost competitive manner”and more quickly by looping or adding compression, Meyer said. “Wedon’t need to build a 500-600 MMcf/d line to serve new load. We cansize our expansion to meet the precise needs the market has. So Ithink from a gas supply, from a flexibility and from a costperspective, it would be very difficult for another pipeline tocompete” against FGT in the Florida market. Since 1990, thepipeline – which extends from the southern tip of Texas to southerntip of Florida – has doubled in size to 5,000 miles as a result ofseveral expansion projects.

Meyer further thinks the planned Buccaneer line, which would run400 miles under the Gulf of Mexico and come ashore somewhere nearTampa Bay, could face stiff opposition from state regulators andenvironmentalists. “Obviously, there has not been one [pipeline]built across the Gulf to the state of Florida. Thestate…historically has been very protective of its beaches andwaterways, and I think rightfully so. I think this would be a realconcern if I were looking at building across the Gulf,” he toldNGI.

One potential problem for Williams could be obtaining aSubmerged Land Environmental Resource Permit (SLERP) from Florida’sEnvironmental Regulation Committee (ERC). “Anybody talking abouttouching Florida’s coast would have to get one,” said ERCspokeswoman Jacki McGority, “We issue them and I can tell you thatFlorida is very protective.”

Williams, however, is not intimidated by the environmentalissue. “We will soon begin surveying the landfall area to determinea path that will minimize the impact of our construction on theenvironment,” spokesman Paul Gredell said, “Moreover, we believethat the overall environmental impact of our project will bepositive as we bring an incremental source of natural gas intoFlorida.”

“It’s fair to say we have our eye on those electric generationplants springing up all over Florida, as does FGT.” Gredell said.The Florida Reliability Coordinating Council predicts the need for10,000 MW of additional power generation in the state by 2007. Iffueled entirely by gas, that amount of power could require anadditional 1.5 Bcf/d of capacity.

Meyer said he wouldn’t be at all surprised to see other pipelinecompetitors try to enter the Florida market in the future to cashin on the expected growth in the generation market, but he’s notworried about that now. “…[O]ur focus is on our customers intrying to work very, very closely with them and what they want todo…and really not focus on the competition. I think if I focus onanother pipeline I’m going to be a day late and a dollar short.”

FGT Files for Expansion

FGT is staying on top of the situation, filing its fourthexpansion/extension project at FERC last week. If approved by theCommission, the project would make gas available to customers inthe southwestern part of the state for the first time.

The “anchor” tenant on the proposed 205-mile project will beFlorida Power &amp Light’s (FP&ampL) Fort Meyers generationfacility in southwest Florida, which is expected to be repoweredand brought into commercial operation by May 2001. FP&ampL plans tospend about $500 million to turn the existing oil-fired facilityinto a combined-cycle power plant with a capacity of 1,500 MWs.

Plans specifically call for FGT to extend its 30-inch West Legby about 114 miles from Hillsborough County, FL, to the FortMeyers’ generating station, enabling it to receive around 180,000MMBtu/d of capacity by April 2000. This is more than half of the272,000 MMBtu/d of capacity that would be added by the project.

As another major aspect of the $350 million expansion, FGTproposes to build a new 46-mile Smyrna Beach lateral in the easternpart of the state to serve a proposed Duke Energy generationstation, according to the pipeline’s application. The new linewould traverse Lake, Seminole and Volusia counties in Florida.

The pipeline further seeks to build and add mainline looping,compression totaling 48,570 horsepower, four new delivery pointsincluding three measurement stations, and other associatedfacilities in Mississippi, Alabama and Florida. The proposedexpansion/extension, according to FGT,would provide customerswith access to new deep-water gas supplies via interconnects withDestin Pipeline and Transcontinental Gas Pipeline’s Mobile Bayline.

Eight shippers already have signed 20-year agreements for theentire firm capacity of the proposed project, FGT said. Theyinclude FP&ampL; Florida Power Corp., Kissimmee Utility Authority;Florida Municipal Power Agency; Peoples Gas System, a division ofTampa Electric Co.; Georgia-Pacific Corp.; National Gypsum Co.; andEnron Capital &amp Trade Resources. These customers are expected toinvest about $1 billion over the next few years in new powerplants, plant repowering/modifications and other facilities, thepipeline noted.

FGT, a subsidiary of Citrus Corp., which is owned by Sonat andEnron, has asked the Commission to roll in the project costs withits Phase III expansion that was placed into service in March 1995.In addition, it requested that FERC issue a certificate by Jan. 1,2000 in time for it to begin service in May 2001.

John Norris, Susan Parker

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