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Trunkline Negotiates with Several Parties to Sell Facilities

Trunkline Negotiates with Several Parties to Sell Facilities

Trunkline Gas Co. has indicated it has "entered into discussions with several parties" to either sell or spin down one-third of its mainline system - about 720 miles - for the purpose of converting the facilities for transporation of refined petrolum products.

Trunkline first proposed spinning down this segment of its pipeline [Line 100-1], which spans from Illinois to Louisiana, to an affiliate, Trunkline A.P. Pipeline Co., in July 1998 - when it still was owned by Duke Energy. Since then, however, Trunkline's ownership has changed hands, with CMS Energy buying it in March.

"Trunkline is in advanced negotiations, which would result in the conversion of these pipeline facilities for the transportation of refined petroleum products. Negotiations will be concluded within the near future.....," wrote Trunkline President and CEO Christopher A. Helms in an Oct. 27 letter to FERC. Depending on the progress of the negotiations, he said the pipeline either will amend its July 1998 proposal by Dec. 15 or it will "withdraw its application" altogether.

John Barnett, a spokesman for CMS Energy, declined to say how many parties Trunkline was negotiating with, but he did say there were more than one. Nor would he confirm whether Trunkline was planning to sell the pipeline facilities or spin them down .

Under the 1998 proposal, Trunkline A.P. would oversee the conversion of the facilities to transport ethane and hydrocarbon vapors to the Gulf Coast from the proposed Aux Sable Liquids Products processing plant, which is being constructed at the terminus of the 1.4 Bcf/d planned Alliance Pipeline. The spin-down, as original was proposed, would reduce Trunkline's system capacity of about 1,810 MDth/d by 255 MDth/d, or by 14%.

Trunkline cited years of underutilization, deep discounting and the the likelihood of continued decontracting when it announced its intention to shed itself of the 26-inch diameter mainline.

Trunkline shippers are opposed to the pipeline's move. Many consider Trunkline's system still to be a key link in the Midwest gas pipeline grid, even in light of all the new pipeline construction coming into that market.

Susan Parker

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