National Fuel Gas Co. is moving forward on a proposed 83-mile extension of its Empire State Pipeline in New York, which would be the upstream portion of Millennium Pipeline’s proposed Phase I system. Both Millennium and National Fuel said they could file their pipeline plans with FERC before the end of the year or in early 2005.

The projects would provide up to 500 MMcf/d of gas (250 MMcf/d from the Empire extension) to New York customers, mainly KeySpan, which signed precedent agreements to be an “anchor customer” for the proposed pipelines. Empire’s portion would extend from Victor, NY, south to Corning, NY, while the Millennium Phase I project would continue from Corning to Ramapo in Rockland County, where several other downstream pipelines, including Columbia Gas and Algonquin, interconnect. Gas also would feed into Entergy’s Bowline power plant.

“We launched the Empire project to the local media last week,” said National Fuel spokeswoman Julie Coppola Cox. “At the same time, we are meeting with local, state and federal elected officials, and we’re now scheduling our open houses. We’ll be sending packets to the landowners on our routing alternatives in the next couple of weeks.

“So far we haven’t discovered any particularly problematic environmental or other kinds of issues [with the Empire extension],” she said. “That’s what this phase of the outreach is designed to help us yield. This is a pretty straightforward mid-sized project. The time is right for it, the market is ready for it and it’s certainly needed to try to restore some balance to this energy marketplace,” Cox said.

Few would deny that new pipeline capacity is needed in the Northeast where gas prices currently are averaging $6.25/MMBtu. However, Millennium’s original proposal was blocked by the state of New York because of its expected environmental impact at a proposed Hudson River crossing near Haverstraw Bay.

Using its authority under the Coastal Zone Management Act (CZMA), the state said the project would damage environmental and commercial resources in its coastal areas, and the Commerce Department, which heard Millennium’s CZMA appeal, agreed. Project sponsors currently are appealing of the ruling, but in the meantime, have decided to move forward with a phased expansion that would put the western portion (west of the Hudson River crossing) in service first (see NGI, Feb. 23).

“There’s been a lot of active work this summer to pull our amendment to our application together,” said Millennium spokesman Karl Brack. “We would hope that we will have something ready to go within the next few months — I’m not sure if it will be before the end of the year. We are still looking at the FERC certified route, but part of what we are doing now is going in and making sure the formal plan for building that [phase I] piece is well detailed and we have every ‘i’ dotted and every ‘t’ crossed before we file the amendment.”

He said the company also has been working with state officials on Phase 2, which would include the river crossing to New York City. “We’ve been in discussions with the Department of State and the governor’s office, periodically updating them on the situation and talking to them about the project and what we can do to work with them to try to complete this link into New York City,” Brack said. “This is taking place even as the court proceedings are ongoing.

“I think everyone agrees there is a need for the energy in the metropolitan market, it’s just a matter of making sure we satisfy the interests from an environmental standpoint and from a constructibility standpoint.”

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