Responding to FERC’s concerns that key customers may back out of its Greenbrier Pipeline project, Dominion Transmission Inc. reported to the agency Thursday that approximately 90% of the transportation capacity to be created by the proposed natural gas pipeline has been subscribed by power generators and local distribution companies (LDCs), a company spokesman said.

FERC staff called on Dominion Transmission to immediately furnish information about the current status of the precedent agreements that had been cited as support for its proposed $497 million Greenbrier Pipeline, which would serve expanding gas demand in the Mid-Atlantic and Southeast regions, primarily Virginia and North Carolina.

“There have been reports that the sponsors of certain of the proposed gas-fired electric generating power plants that Greenbrier Pipeline Co. LLC proposes to serve in northern/central North Carolina may be cancelled,” wrote J. Mark Robinson, director of FERC’s Office of Energy Projects, in an April 2 letter to Dominion, a majority partner in Greenbrier [CP02-396]. These “proposed plants would utilize the majority of the capacity of the Greenbrier project,” prompting FERC to question whether the market demand for the pipe still exists.

Only one power generation developer — Mirant Americas Development Corp. — has canceled a contract for 60,000 Dth/d of capacity with Dominion Transmission, Dominion spokesman Robert Fulton told NGI Friday. All other agreements with power generators, LDCs and a gas marketer remain in effect, he noted.

Fulton estimated that 540,000 Dth/d of the project’s 600,000 Dth/d of total capacity was under precedent agreements. He further noted the Greenbrier Pipeline project was not entirely dependent on the construction of the new generation facilities. “We have other markets in that area as well, such as LDC demand” to support the pipeline. Even without the power generation plants, he said at least 40% of the pipeline would be subscribed.

While Greenbrier “is well aware of the current uncertainty surrounding the construction and timing of the gas-fired electric generation facilities that were planned at the time of its certificate application,” it “remains optimistic and confident that its project will be needed to serve the demand” in the region, said Dominion Transmission in its response to FERC on Thursday.

The Commission had been expected to vote out a certificate for the Greenbrier project at its last regular meeting, but it unexpectedly struck the item from the agenda. The agency had awarded final environmental clearance to Greenbrier in early March.

The planned 276-mile pipeline would deliver gas to at least three gas-fired power generation plants, two LDCs and one gas marketer in the Mid-Atlantic and Southeast regions. Assuming FERC awards a certificate, a portion of the line is expected to be operational in June 2005, with the remainder scheduled for in-service in the fourth quarter of that year.

The proposed pipeline would originate in Kanawha County, WV, with interconnections to Dominion Transmission and Tennessee Pipeline, and extend through southwestern Virginia into Granville County, NC. Dominion Transmission has a 67% ownership stake in the project, while Piedmont Natural Gas has a 33% interest. Piedmont serves 700,000 LDC customers in North Carolina.

Gas supplies delivered from Dominion Transmission and Tennessee into Greenbrier near Charleston, WV, would come from the Appalachian, Canadian, Gulf Coast and Mid-Continent regions or storage facilities operated by Dominion.

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