More than seven months after the project was first announced, El Paso Corp. said Tuesday that it is holding new open seasons for the Seafarer Pipeline System, which will transport natural gas from the Bahamas to southern Florida to feed new gas-fired power plants in the state. Preliminary open seasons were conducted in October 2001 when the $226 million project was still known as the Bahama Cay Pipeline (see Daily GPI, Oct. 3, 2001).

The company said that due to expansions of the project’s capacity and scope, new open seasons began Tuesday and will continue through June 12. In late March, El Paso announced that it was increasing the project’s capacity from 800 MMcf/d to 1 Bcf/d over a 24-hour period (see Daily GPI, March 20). El Paso said the 162-mile, 26-inch diameter Seafarer is currently designed based on a 16-hour delivery period. Despite the company’s capacity increase in March, El Paso said the 16-hour delivery period would result in an effective capacity of approximately 700 MMcf/d. The company added that it expects the system to be in service by the second quarter of 2005.

However, it remains to be seen whether the U.S. Navy will oppose the pipeline. Just last month, a pipeline project similar to Seafarer, proposed by AES Ocean Express LLC, ran into stiff opposition from the Navy (see Daily GPI, April 3). According to the armed forces branch, AES’ proposed line would run through its south Florida test range, compromising “the mission, operations, maintenance, safety and security at the [testing facility]; thereby adversely impacting unique surface and submarine warfare testing which are essential to the Navy and the security of the nation and the fleet.” AES Ocean Express would pass through the 12-square-mile test range near Dania, FL.

El Paso said that due to an early change in its pipeline route, the project has been able to avoid Navy disapproval so far. “Up until this point, the Navy has not expressed any concerns with our proposal,” said Stan Babiuk, vice president of major projects for El Paso’s Eastern Pipeline Group. “Originally, we started looking in the Port Everglades area for landfall, but it became clear that it would be a little more problematic there, so we moved it to Riviera Beach because we felt that it was a much more advantageous location.” He added that because of the switch in landfall plans, the pipeline now steers clear of the Navy’s 12-square-mile test range.

El Paso said the new simultaneous open seasons will offer transportation capacity on a non-discriminatory basis. To acquire this capacity on Seafarer, potential customers, including those who participated in the earlier open seasons, must participate in the new open seasons.

Once completed, the pipeline will transport regasified LNG from El Paso Global LNG’s proposed terminal on Grand Bahama Island to southern Florida, crossing the United States-Bahamas Exclusive Economic Zone (EEZ) boundary in the Atlantic Ocean. From landfall at the Port of Palm Beach, the pipeline is expected to continue westward, delivering gas at an interconnection with the Florida Gas Transmission interstate pipeline system and at a delivery point in Martin County.

“This new pipeline system will provide shippers with increased access to competitively priced natural gas supplies,” said E. J. Holm, CEO of El Paso’s Eastern Pipelines. “The delivery points create additional advantage for our customers because they are located in one of the nation’s premier growth markets for new energy demand.”

The project is divided into two sections since it crosses the EEZ boundary and will be managed by two separate El Paso subsidiaries. El Paso Bahamas Holding B.V. will conduct the open season for capacity on the portion of pipeline that will carry regasified LNG from the proposed terminal to the EEZ boundary. El Paso said that Seafarer US Pipeline System, Inc. will conduct the open season for transportation capacity on the portion of the pipeline that will deliver natural gas from the EEZ boundary to southern Florida.

The gas transported on the pipeline is expected to serve Florida’s booming gas-fired power industry. Based on the 2002 Ten-Year Site Plans for power generation filed by Florida’s utilities, Florida’s incremental installed gas-fired power generation facilities are projected to increase by more than 11,000 MW by the end of 2005. This projected demand for power, fueled by gas, will require more than 2 Bcf/d of additional delivery capacity and natural gas supply.

For more information on the open seasons, contact Allen Kelley at (832) 676-2531 (allen.kelley@elpaso.com) or Stan Babiuk at (832) 676-2535 (stan.babiuk@elpaso.com).

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