Southern LNG Vaporization Upgrade Approved

Southern LNG's proposed enhancements to its Elba Island vaporization facilities were granted preliminary approval on non-environmental grounds by FERC last week. Southern plans to remove five existing vaporizers and replace them with more efficient ones, resulting in 135 MMcf/d of increased send-out capability.

The project will bring sendout capacity to 675 MMcf/d at a cost of $14 million. Southern's only capacity holder, El Paso Merchant Energy, will pick up the tab.

FERC also granted Southern's request for clarification that its certificate not limit its ability to import LNG from sources other than Trinidad, which was specified in the original order approving recommissioning. The Elba Island terminal is scheduled to be in service in October.

FERC issued its certificate on the facility in March 2000, authorizing Southern to construct new facilities and to repair and upgrade existing facilities in order to be able to provide storage for 4 Bcf of liquefied natural gas and to send out vaporized gas on an average design basis. As a result of an open season, El Paso Merchant Energy contracted for the entire 100% of the capacity at the facility.

Enron LNG protested the certificate and came to an agreement with Southern that led to the proposed modifications to Southern's vaporization facilities. The proposed modifications will increase sendout to 160 Bcf/year from 85 Bcf/year. According to Southern, El Paso Merchant Energy has agreed to import LNG purchased from Enron and Point Fortin LNG Exports Ltd that will come from a variety of foreign sources and will have various heating values. Southern plans to reduce the heat content of the LNG to a standard level by blending the LNG with gas in Southern's LNG facilities or in the facilities of its pipeline affiliate, Southern Natural Gas.

Rocco Canonica

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