The Independence Pipeline and Millennium Pipeline projectscontend CNG Transmission Corp. is speaking with a forked tonguewhen it comes to the need for new pipeline capacity to supply thegrowth in gas demand that’s expected for the Northeast market.

On one hand, CNG claims no market exists to support thecompeting Northeast-bound Independence and Millennium projects, butit did an about-face last week when it announced a joint venturewith Tennessee Gas Pipeline to transport 750,000 Dth/d of gas fromChicago and the Niagara Import Point to markets in New York,Pennsylvania and New England, the two projects pointed out[CP97-315 et al].

But CNG, which views its proposal as a response to theIndependence and Millennium greenfield projects, said the jointventure-the Atlantic Alliance Project-doesn’t signal a departurefrom its previous views on Northeast market growth. “In fact, thisproject represents a reasonable way to accommodate market growth,while encouraging the efficient use of the existing pipeline grid,”it told FERC. CNG added the project would involve “construction ofa relatively small amount of new pipeline facilities.”

Independence contends CNG has stooped to using “delayingtactics,” such as criticizing FERC’s environmental analysis of the1 Bcf/d Independence, in order to give its Atlantic AllianceProject time to “catch up.” Independence, which was first announcedin 1997, urged FERC “not to countenance” such conduct by CNG.

Millennium officials also accused CNG of similar tactics, andadded that its recently announced Atlantic Alliance Project showsthat CNG has flip-flopped on its previous claim that no newcapacity would be immediately needed for the Northeast. TheAtlantic Alliance “plans make it clear that CNG does not agree withthe testimony it…..presented to the Commission [at the Northeastconference in June], and that the testimony was only filed as partof a regulatory strategy designed to delay the Millennium project,”said David C. Pentzien, chairman of the Millennium PipelineManagement Co.

CNG, as well as Texas Eastern Transmission (Tetco), has askedthe Commission to suspend further action on Independence while FERCstaff considers alternatives to the project, including ones thatthey have proposed. They insist staff’s draft environmental impactstatement (DEIS) analysis of the Independence and the relatedMarketLink projects was “deficient” and “useless” because it failedto review all viable alternatives. Tetco has gone a “step further”and has asked FERC to hold another conference to assess variousproject alternatives. Tetco and CNG-which have a dominant grip onthe Northeast market-insist their proposed alternatives couldeliminate much of the need for the 624-mile Independence projectand possibly the MarketLink expansion. CNG also sees itsalternative as a substitute for Columbia Gas Transmission’s NewYork-bound Millennium project. Their alternatives incorporate theuse of existing and potential turned-back capacity on theirsystems.

But Independence noted “for sufficient turnback capacity to beavailable to meet the firm needs for Independence/MarketLinkmarkets, substantial existing market demand that is currently beingserved by that capacity would have to disappear….. Independencedoes not believe this is a realistic assumption.” And “if Tetco’sand CNG’s assumptions are incorrect with respect to theavailability of turnback capacity, even more facilities would berequired to be constructed and possibly even more delay” wouldoccur, argued Independence, whose sponsors include ANR Pipeline,National Fuel Gas Supply and Transco. The Commission “should notdelay the Independence proceeding because two pipeline competitorshave presented incomplete, speculative and unfiled ‘alternatives’at the eleventh hour,” Independence said.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.