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CNG Flip-Flops on Northeast Gas Need, Other Pipe Projects Say

CNG Flip-Flops on Northeast Gas Need, Other Pipe Projects Say

The sponsors of Independence Pipeline and Millennium Pipeline projects contend CNG Transmission Corp. is speaking with a forked tongue when it comes to assessing the future need for new pipeline capacity to the Northeast market.

CNG has long been claiming that no market exists to support the Northeast-bound Independence and Millennium projects, but it did an about-face a few weeks ago when it announced a joint venture with Tennessee Gas Pipeline to transport 750,000 Dth/d of gas from Chicago and the Niagara Import Point to markets in New York, Pennsylvania and New England, according to sponsors of Independence and Millennium [CP97-315 et al].

But CNG, which views its proposal as "economically and environmentally superior" to the Independence and Millennium greenfield projects, said its joint venture - the Atlantic Alliance Project - doesn't signal a departure from its previous views on Northeast market growth. "In fact, this project represents a reasonable way to accommodate market growth, while encouraging the efficient use of the existing pipeline grid," it told FERC. CNG added the project would involve "construction of a relatively small amount of new pipeline facilities," possibly as little as 31 miles.

Independence contends CNG's has stooped to using "delaying tactics," such as criticizing FERC's environmental analysis of the 1 Bcf/d Independence, in order to give its Atlantic Alliance Project time to "catch up."

Millennium officials also accused CNG of similar tactics, adding that the Atlantic Alliance Project shows CNG has flip-flopped on its previous claim that no new capacity is needed for the Northeast. The Atlantic Alliance "plans make it clear that CNG does not agree with the testimony it.....presented to the Commission [at the Northeast conference in June], and that the testimony was only filed as part of a regulatory strategy designed to delay the Millennium project," said David C. Pentzien, chairman of the Millennium Pipeline Management Co., the sole general partner in the project.

CNG, as well as Texas Eastern Transmission (Tetco), has asked the Commission to suspend further action on Independence while FERC staff considers alternatives to the project, including ones that they have proposed. They insist staff's draft environmental impact statement (DEIS) analysis of the Independence and the related MarketLink projects was "deficient" and "useless" because it failed to review all viable alternatives. Tetco has gone a "step further" and has asked FERC to hold another conference to assess various project alternatives. CNG said it supports Tetco's request.

But Independence countered that "neither proposal demonstrated that sufficient [turnback] capacity would be available to serve the needs of the Independence and MarketLink shippers anytime remotely close to a November 2000 in-service date." Moreover, it said that "for sufficient turnback capacity to be available to meet the firm needs for Independence/MarketLink markets, substantial existing market demand that is currently being served by that capacity would have to disappear.....Independence does not believe this is a realistic assumption."

Susan Parker

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