El Paso Energy Corp. and Enron announced late yesterday plans tojointly construct a pipeline from Savannah, GA to a point ofinterconnection with Florida Gas Transmission (FGT) nearJacksonville, FL. The pipe will be fed by El Paso’s Elba Island,GA, LNG terminal, which is being reactivated.

The venture, called Cypress Natural Gas Co., plans to file anapplication with the FERC in January 2001 for authorization toconstruct and operate the pipeline. Construction is expected tobegin in the third quarter of 2002, and the pipeline’s projectedin-service date is April 2003.

No cost estimates or capacity information could be gained beforepress time. A preliminary route has been selected for the 160-milepipeline pending final routing decisions that will be made afterdiscussions are held with local officials, prospective landowners,and various environmental agencies, El Paso said. Plans for the newpipeline will be finalized after an open season that will be heldfrom May 1 through June 30.

El Paso said the new pipeline will provide southeastern Georgiaand Florida with an additional pipeline supplier and access to animportant new gas supply source. Southern LNG Co., an affiliate ofEl Paso Energy, was recently authorized by FERC to reactivate itsliquefied natural gas terminal near Savannah. The regasified LNGwill be the primary supply source for the new pipeline withadditional gas supplied by Southern Natural Gas Co. (Sonat). Theproject was announced late yesterday after FERC approved two rivalsupply pipelines for the Sunshine State. (See related story, thisissue)

“We believe this pipeline project will greatly enhance ourability to serve natural gas and power generation markets inGeorgia and Florida,” said John W. Somerhalder, president of ElPaso Energy’s pipeline group.

In a related development, Florida Gas Transmission (FGT)announced plans to hold an open season from May 1 to June 30 tosolicit bids for an expansion of its 4,700-mile pipeline systemsouth of Jacksonville. Plans for the expansion will be finalizedafter the open season responses are evaluated. The company plans todevelop and market this expansion in order to serve new powergeneration loads currently being developed in central and southernFlorida, Enron said. FGT is co-owned by Enron and El Paso.

“We believe the Cypress project, coupled with an expansion ofFlorida Gas’ pipeline, is a very cost effective and environmentallysound option for meeting the additional demand for natural gas inthe state,” said Rock Meyer, president of FGT. “We also believethese projects will enable us to diversify the gas supply sourceswe can make available to our customers in Florida.”

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