PNGTS Prepares Line for Service in March
The Portland Natural Gas Transmission System (PNGTS) and
TransQuebec & Maritimes Pipeline (TQM) held a ribbon-cutting
ceremony last week at the U.S./Canada border to announce completion
of the first high-capacity gas pipeline to serve northern New
England. Commercial operations, however, are not expected to begin
until Saturday, March 6. And PNGTS probably will not be
transporting its full certificated capacity of 178,000 MMBtu/d
until the end of the year, said spokesman John Flumerfelt, because
several of the power plants and paper mills to be served by the
pipeline are not complete.
The pipeline is in good shape, however, compared to competitor
Maritimes & Northeast Pipeline, with which PNGTS jointly owns
and operates more than 100 miles of pipe extending from Westbrook,
ME, north of Portland to a connection with Tennessee Gas in Dracut,
MA. The Maritimes project is being revamped because of the loss or
delay of numerous U.S. markets and the growth of markets north of
the border in Canada. Out of the 17 shippers on board when the
Maritimes project was approved by FERC, only four remain.
"Having a pipeline complete always puts you in real good shape,"
Flumerfelt noted. "We have solid customers, a good end-use market."
PNGTS has signed long-term transportation contracts with eight
shippers, including paper mills, power plants, gas utilities and
third-party marketers. Meanwhile, Maritimes has struggled to line
up New England markets. Flumerfelt attributes PNGTS' success to a
number of factors, not least of which is just plain luck.
"Every customer up here is different," he said. "PNGTS' shippers
all have different reasons for converting to gas. Some are purely
cost-based and they are looking to gas to save money. Other
customers have environmental compliance issues they are trying to
address, or they're trying to obtain process improvements in their
facility. I think PNGTS was fortunate to have a couple big paper
mills that we just caught at the right time. They had a good and
timely reason to switch to gas."
International Paper, which is using PNGTS transported gas to
fuel a new cogeneration facility that's being built on site,
intends to reap significant environmental benefits. Mead Corp. is
looking for environmental benefits as well as process improvements.
Wasau Paper in New Hampshire was under an environmental compliance
mandate from the state. For Wasau, it was either clean up air
emissions or be shut down or fined.
In contrast, Maritimes' potential customers for whatever reason
didn't have that urgency to switch to gas. Low fuel oil prices
didn't help. Most of the gas entering the New England market will
be displacing fuel oil or replacing gas (35 MMcf/d) transported on
the Portland Pipe Line, which is being converted back to oil
transportation. Some of Maritimes laterals also were too long and
"We looked at some of those markets as well and they seemed
difficult to justify," said Flumerfelt. "An 80-mile lateral to
serve a relatively small paper mill load is difficult to justify
economically. The load doesn't cover the cost of facilities."
Maritimes' biggest customer was going to be Central Maine Power,
which planned to do a conversion at an oil-fired power plant (the
Wyman station) but then was required by the legislature to sell its
assets. The potential buyer of those CMP assets, FPL, now is trying
to get out of the purchase.
In the meantime, PNGTS is already thinking expansion. "You've
got 2,300 MW of high-efficiency combined cycle gas-fired power
generation permitted in Maine and 900 MW of that is under
construction. Only one of the five plants, a Duke Energy power
plant, is on Maritimes. The rest are either on PNGTS or the joint
pipeline south of Westbrook, ME," said Flumerfelt.
The PNGTS project includes 292 miles of 24- and 30-inch mainline
in the U.S., including 50 miles of variously sized laterals to
provide new and expanded service to contiguous market areas in New
Hampshire and Maine. In Canada, the TQM Extension includes 136
miles (217 km) of 24-inch mainline between Lachenaie and East