Two would go by sea, and now one would travel on land, makingfor three brand new pipeline projects targeting the Floridapeninsula and the state’s substantial growth in power generationgas demand.

Last week Duke Energy unveiled plans for its Sawgrass EnergyTransmission System – a major interstate that would supplySoutheast markets. Duke’s Sawgrass joins Williams-Transco’sBuccaneer Pipeline and Coastal’s Gulfstream projects, as well asexpansion of Florida Gas Transmission (FGT), in targeting apotential 1.5 Bcf/d growth in demand for Florida power generation.

The Sawgrass system would have capacity of about 1 Bcf/d andbegin near Coden, AL, cross southern Mobile Bay and continue intothe Florida Panhandle and down the peninsula. It would cost about$1.3 billion and is planned to be in service by 2003. Besides powergeneration, the project also targets large industrials and gasdistribution systems.

Buccaneer and Gulfstream propose essentially identical routes:from Mobile, AL, across the Gulf of Mexico to Tampa, FL, and acrossFlorida to cities along the Atlantic Coast. Because it would take aland route, Sawgrass proposes to serve gas demand in Alabama andthe Florida Panhandle. “Certainly some of the larger benefits [ofSawgrass] to both states are the security and competition thatresult from the addition of a new transportation system and theenvironmental advantages natural gas brings to the area,” saidRobert Evans, president of Duke Energy Southeast Pipeline Corp.”The Mobile Bay region and communities throughout Florida can beassured that Duke Energy is committed to thoroughly reviewing allaspects of the project for environmental compatibility.”

It remains to be seen whether a route by land or one by sea ismore attractive to regulators and landowners. Evans said Duke willwork with the states and federal government to allay anyenvironmental concerns. Because it’s taking a land route, Sawgrasswill have to deal with more landowners than Buccaneer orGulfstream. But some of those landowners or their neighbors couldalso be customers, adding to the pipe’s revenue. Also, Sawgrasswouldn’t be wading into Florida’s traditionally jealously guardedcoastal waters. Over the next several months, Duke will begindetailed route analysis.

“Florida faces a constantly growing need for more electricpower,” Evans said. “Natural gas represents the cleanest, mostcost-efficient fuel source for Florida generating plants to meetthis rapidly growing need.” Based on the most recent estimatesreleased by the state Public Service Commission, Florida’sprojected need for new generating capacity over the next decade hasrisen another 20% above estimates made in late 1997, making it thefastest growing market in the nation.

In July 1998, the Florida Reliability Coordinating Councilsubmitted a plan to the Florida Public Service Commission outliningthe need for more than 10,000 MW of additional power generationcapacity within the state by 2007. If fueled entirely by gas, thiswould require an additional 1.5 Bcf/d of capacity (see NGI Oct. 19,1998). Power demand is soaring particularly in southwestern Floridawhere currently there are no gas pipelines.

Sawgrass would create some synergies among Duke Energy businessunits, Evans said. On the market end Duke would be developing powergeneration. Upstream, the Dauphin Island Gathering Partnership – ofwhich Duke owns 37% – is a partner in a gas processing plant atCoden.

Duke has had discussions with several potential customers, andthe Sawgrass project has a committed load of about 250 MMcf/d fromDuke Energy North America, Duke Energy’s wholesale power generationdevelopment business unit.

The Phase IV expansion of FGT – Florida’s only interstate – haseight shippers and is to be in service by May 2001. Phase V isexpected to be anchored by power generation load. FGT spokeswomanGina Taylor told NGI the pipeline has firm commitments from FloridaPower & Light (FPL) and Southern Co. subsidiary Gulf Power Co.

Williams spokesman Chris Stockton said the company hopes to makea filing at the Federal Energy Regulatory Commission for Buccaneerby the end of the summer. Meetings have been held withenvironmental groups and public officials to discuss routingissues. Buccaneer is projected to cost $1.5 billion and has 1.3Bcf/d in nominations. “We’re currently in the process of trying tofinalize some of those contracts,” Stockton said. Buccaneer isprojected to cost about $1.5 billion.

Coastal spokesman Joe Martucci said Gulfstream has some firmcommitments. “I can’t really be specific in terms of who thecustomers are or the commitments. The response we’ve received, Iwould say, has been overwhelmingly positive, especially theenvironmental community in Florida.” Gulfstream is expected to costabout $1.2 billion.

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