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Independence, SupplyLink Still Waiting for PDs

January 18, 1999
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Independence, SupplyLink Still Waiting for PDs

Citing the need to accommodate increased Canadian gas supplies flowing into the Midwest, the sponsors of Independence Pipeline and SupplyLink have urged FERC to promptly issue preliminary determinations (PDs) on the non-environmental aspects of their pipeline projects.

The applications for the proposed Independence line and the ANR Pipeline-sponsored SupplyLink project have been stalled at the Commission for nearly two years, while competing projects are moving through the certificate process, the sponsors said. They fear that if FERC delays the preliminary rulings any longer they won't be able to meet their projected in-service dates - November 1999 for SupplyLink and November 2000 for Independence - and will be put at a "competitive disadvantage."

The proposed Independence line, if approved by the Commission, would extend 400 miles from Defiance, OH, to the Leidy, PA, hub, where it would intersect with up to six different pipelines capable of delivering gas along the entire Eastern Seaboard. The $678 million pipeline, which would have a winter capacity of about 1 Bcf/d, would provide gas producers in Canada, the Rocky Mountain and Mid-Continent regions with a much-needed link to markets in the East and Mid-Atlantic, according to the project's partners. They are ANR, Williams' Transcontinental Pipeline and National Fuel Gas.

SupplyLink, in contrast, would "reinforce" ANR's existing system upstream of the proposed Independence line, basically from Joliet, IL, to Defiance. It would add about 750 MMcf/d of capacity through looping and new compression.

ANR contends that quick action on SupplyLink's PD is "clearly warranted," given that "all of the record materials necessary to address the non-environmental aspects of [its] proposal are now before the Commission." It believes the project is in the public interest in light of the growing gas supplies that now are coming into the Joliet hub via the Northern Border Pipeline expansion, and will be in even more demand when the Alliance Pipeline goes into service in November 2000.

A prompt PD further is needed to ensure that ANR "is placed on an equal regulatory footing with, and is thus able to compete fairly and effectively with, other projects designed to provide similar new transportation services emanating from the Joliet hub." ANR pointed out that FERC issued a PD to a competing project, Vector Pipeline L.P., within 10 months of filing its application. "It is important that no competitor be placed at a competitive disadvantage through regulatory delay."

On a related issue, FERC staff indicated it has had problems processing Independence's application due to "certain termination provisions" in the proposed pipeline's precedent agreements with Enron Capital &amp Trade Resources and Statoil Energy. But the sponsors of Independence contend that shouldn't be a issue considering they have a binding precedent agreement with DirectLink Gas Marketing Co. for 500,000 Dth/d, which represents 55% of the pipeline's capacity.

"...[I]n light of the DirectLink precedent agreement, Independence sees no reason why the contracts with Enron and Statoil should affect efforts to complete processing of Independence's application, including the prompt issuance of a preliminary determination on non-environmental issues."

Susan Parker

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ISSN © 2577-9877 | ISSN © 1532-1266
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