The rush is on to build new pipeline capacity to serve rapidgas-fired power generation growth in the Southeast and Mid-Atlanticregions. Dominion Transmission last week announced a proposed $400million pipeline to serve primarily new power plants in Virginiaand North Carolina.

The Greenbrier Pipeline project would extend from Dominion’s(formerly CNG’s) Cornwell Station near Charleston, WV, theeastern-most tip of the existing system in West Virginia, about 200miles to a connection with Transcontinental Gas Pipe Line inRockingham, NC.

“This fast-growing Mid-Atlantic region continues to enjoysignificant economic expansion,” said Dominion CEO Thos. E. Capps.”All of the regional demand projections point to a need forsubstantial improvements in our energy delivery infrastructure.This project will help meet this need economically.”

The greenfield pipe would be designed to transport up to 600,000Dth/d of Appalachian, Canadian and Gulf Coast gas production tomarkets in the Mid-Atlantic and Southeast regions starting in June2005.

“Independence and Millennium are going to serve the Northeastmarket. Maritimes is bringing Sable Island gas to serve [NewEngland]. There probably are a number of other projects beingproposed for the Northeast, but this is a southeastern project andthere’s only one pipeline currently serving that whole region rightnow,” said Joe Kienle, director of business development forDominion Transmission.

The Greenbrier project is a competitive alternative toTranscontinental Gas Pipeline’s proposed Momentum project, anotherof Transco’s many mainline expansion proposals. Transco recentlyconcluded an open season on Momentum, which would add firm capacityfrom Station 65 in Louisiana to Station 165 in Virginia. Theproject is anticipated to be in service by May 1, 2003. The companyis expecting between 250,000 and 700,000 Dth/d of demand.

“I think a lot of people who use energy would like to havealternate suppliers if they could — if anything, forreliability,” said Kienle. “There also could be a limit on theother pipe as to how much more they can expand and still becompetitive. How much more looping and compression can they add tothat system without having to build a new line? There’s a lot ofactivity along that pipeline. There’s a big question about whetherTransco can meet it all. That’s what the potential customers thatI’ve talked to have concerns about.”

Transco’s Gary Lauderdale, senior vice president and generalmanager, said his pipeline will have no major difficulties meetingexpected demand growth. Lauderdale said market interest for theMomentum project has been “very significant.”

He also noted that it’s actually much more economic to addlooping and compression to an existing line than to build a newgreenfield pipeline. “It’s always more economic to loop an existingline particularly now with the fact that it’s more difficult tobuild greenfield projects because of the more complicatedcertificate process from an environmental and landowner standpoint.The existing right of way has a real premium value to it.”

10,000 MW Planned

Both projects are targeting about 10,000 MW of new gas-firedpower generation that is planned to be built in Virginia and NorthCarolina by 2007, which roughly amounts to about 1.8 Bcf/d ofincremental growth.

“If even part of that is built, our project is still needed,”said Kienle. “The Transco project is scheduled for 2003. We arelooking toward the 2005 market, [so both could be built],” headded. Lauderdale disagreed. “If Momentum is built in 2003, thereprobably won’t be any market left for another project.”

But Kienle believes Greenbrier may have the upper hand becausein addition to creating pipeline competition for the first time inthe region, it will bring much needed access to storage. DominionTransmission operates one of the largest gas storage complexes inthe country. “That’s quite different from the other mainlineproject [Transco’s], which is just bringing Gulf production north,”he said,

“We also have a different fuel supply diversity. We have accessto Appalachian production, but also to Canadian gas. Over the yearswe’ve increased our access to Canadian gas through our Lysanderinterconnect with the Empire Pipeline in New York. Last year we puta new connection in that adds about 100,000 Dth/d. On top of thatwe already had out of the Canajoharie interconnect with Iroquoisand our Niagara import point.”

Lauderdale said Transco also has a diverse supply mix, whichincludes Canadian and Appalachian production through the Leidy Hub,storage gas mainly leased from Dominion and its recently acquiredCove Point LNG facility in Maryland.

Dominion is holding an open season Oct. 5-Dec. 5 to test marketinterest in the Greenbrier project.

Rocco Canonica

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