Stagecoach Storage, Pipe Projects Get FERC Nod

FERC last week granted certificates, subject to conditions, to Central New York Oil and Gas Co. (CNYOG) to proceed with the construction of its Stagecoach storage project and to Tennessee Gas Pipeline to build a lateral connecting its system with the storage facility.

The certificate gives CNYOG the go-head to develop its Stagecoach Storage Field Project at an existing gas-producing field located in Tioga County, NY, and Bradford County, PA. The storage project will have an initial working gas capacity ranging from 11.9 Bcf to 13.6 Bcf, and will be capable of supporting withdrawals of up to 500 MMcf/d and injections of up to 250 MMcf/d. The maximum storage inventory in the Stagecoach Storage Field cannot exceed 16.75 Bcf without prior Commission authorization, according to the certificate.

eCORP Marketing LLC bid $22.13 million for the entire capacity of the storage field, and has signed a binding 20-year precedent agreement with CNYOG. CNYOG said it is negotiating with eCORP to take a smaller share of the capacity of the Stagecoach storage project so that others can use it.

FERC approved CNYOG's request for market-based rates for firm and interruptible storage services provided by the Stagecoach project. However, it said the rates were subject to re-examination in the event CNYOG expands its storage capacity beyond the amount authorized by the Commission or acquires new facilities.

In granting market-based rates, FERC said CNYOG's share of the storage market in the Pennsylvania and New York region, which currently is dominated by CNG and National Fuel, would be small. It estimated CNYOG, as a new market entrant, would have a 2.8% share of the working gas capacity and 4.3% of the peak-day deliverability capacity.

In the same order, the Commission also gave a thumbs-up to Tennessee to construct its companion project - a 23.7-mile, 30-inch diameter lateral line that would connect to its 300-Line. The so-called Stagecoach Lateral will provide up to 500 MDth/d of firm transportation from the storage field to the 300-Line. Additionally, Tennessee will expand capacity on its 300-Line by 100 MDth/d to accommodate the deliveries from the storage field to the Northeast market. The estimated cost of the lateral and 300-Line expansion was pegged at $81.3 million.

Tennessee reported it has signed a binding 10-year precedent agreement with eCORP for 400 MDth/d of the firm transportation service on the lateral and for 90 MDth/d of firm service on the 300-Line.

FERC directed Tennessee to execute firm contracts for amounts equal to those in its precedent agreements before it can begin construction of the proposed lateral. It further allotted both Tennessee and CNYOG one year to complete the construction of their projects.

Susan Parker

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