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North Alabama Pipeline Ready to Flow

North Alabama Pipeline Ready to Flow

Midcoast Interstate Transmission's (MIT) four-year effort to block construction of Southern Natural's North Alabama Pipeline is coming to a close as the line is poised to start flowing gas. The 120-mile, 70 MMcf/d mainline extension is seen as a threat by MIT, which has enjoyed a monopoly over transportation in that region for years.

The pipeline, which will run from Tuscaloosa, AL, to Huntsville, AL, "is ready to go," said Mel Scott, a spokesman for El Paso Energy. Southern Natural became an El Paso subsidiary when Sonat merged with El Paso last October. "It has its FERC approval for service, but as of yet there have been no nominations." Still, it's not clear when the customers for which the extension was built, such as Decatur Utilities, will be able to make the change to Southern Natural.

Gary Borden, a spokesman for Decatur Utilities, said the Alabama utility has not switched from MIT yet. He said Decatur is waiting for some system improvements on the North Alabama line to be finished and could not give a good time estimate as to when service might be switched. He did say, however, that Decatur expects noticeable savings to be generated from the competition between the two pipelines in the future.

When the North Alabama project starts flowing, MIT's 47-year monopoly as the area's sole source of gas will end. The monopoly was not given up easily. A host of stay attempts and objections concerning the project were launched both at FERC and in the courts. MIT refused to comment on the start-up of the Southern Natural extension.

MIT had filed to build a joint venture project between itself and Southern Natural and had also filed its own alternative to the North Alabama project. Both filings were defeated at FERC. The commission gave its final approval for the pipeline's construction in October of 1998.

Landowner objections were even more fierce. The protestors won a victory last March when FERC temporarily required an end to construction. Although the pipeline is now ready to go, issues such as eminent domain and condemnation of property still are pending in various appeals courts. Southern Natural expects to have them settled by this spring.

Because of the protests, the primary utilities in the area --- Decatur and Huntsville Utilities --- were forced into five-year contracts with MIT in 1998, despite also signing 20-year contracts with Southern Natural for capacity on the new pipeline. Huntsville signed on for 33,254 Dth/d and Decatur inked a 22,000 Dth/d contract. Both contracts will expire in 2003. The two utilities represent between 25% and 33.3% of MIT's system load, a company spokesman said.

MIT, a subsidiary of Houston-based Midcoast Energy Resources, owns and operates a 295-mile interstate pipeline which runs from Selmer, TN, to Huntsville, AL.

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