The Federal Energy Regulatory Commission has approved anexpansion of Southern Natural Gas’ South System to add 335.8 MMcf/dof firm transportation capacity to Sonat’s mainline, primarily todeliver gas to new power plants in Alabama and South Carolina.

The project is supported by 15-year agreements with SouthernCo., South Carolina Pipeline Corp. and the City of LaGrange, GA. Itwill consist of 67 miles of pipeline looping and 53,900 hp ofmainline compression, at an estimated cost $140 million.

Phase I of the project, to be completed by June 1, 2002, willcarry 140 MMcf/d, which includes the 50 MMcf/d committed to SouthCarolina Pipeline for its Urquhart power plant in Aiken County, SC,1.75 MMcf/d going to the City of LaGrange, GA, and 88 MMcf/d toSouthern Company Services (SCS). Phase II, to be completed by June1, 2003 will supply the remaining 196 MMcf/d contracted by SCS. TheSouthern Co. subsidiary has signed on for a total of 284 MMcf/d ofnew capacity to supply two new gas-fired power plants it isbuilding in Alabama.

Reviewing Southern’s cost and revenue data, FERC approved apresumption in favor of rolled-in rate treatment in Southern’s nextrate case. The Commission agreed with Southern’s projections thatthe expansion will bring in $159 million over costs over the15-year life of the contracts. That is despite discounted rates toSCS, which Southern said were necessary because it was incompetition with Transcontinental Gas Pipe Line to sign up the newload.

Southern Natural’s proposed expansion would tie in with SouthCarolina Pipeline’s plans to extend its system by 300 miles toserve three new 200 MW power plants, three ethanol productionfacilities and a new fiber optic cable system in North Carolina.

Ellen Beswick

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