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PNGTS Prepares Line for Service in March

March 1, 1999
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PNGTS Prepares Line for Service in March

The Portland Natural Gas Transmission System (PNGTS) and TransQuebec &amp 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 &amp 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 too expensive.

"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 Hereford, Quebec.

Rocco Canonica

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