FERC has given the green light to Trunkline Gas to abandon a720-mile segment of its mainline natural gas transmission line inthe Midwest region to affiliate CMS Trunkline Pipeline HoldingsInc. and partners for conversion to a refined products pipeline.

Despite protests from some shippers, the Commission order saidthe abandonment of the Trunkline segment would not leave gascustomers capacity short in the Midwest, nor would it drive uptransportation rates [CP00-114]. It noted the gas that would beremoved from the Midwest market as a result of the abandonmentwould be more than made up by the Canadian gas flowing on NorthernBorder Pipeline’s extension into Chicago and the new AlliancePipeline.

The abandonment of the so-called Line 100-1 would reduceTrunkline certificated system-wide capacity by 255 MDth/d, or 14%,to 1.5 MMDth/d from 1.8 MMDth/d, according to the pipeline. Evenwith this reduction, Trunkline contends it will have enoughcapacity to meet demand, which it pegged at 1.43 MMDth/d.

“Our engineering analysis confirms that the loss of 255 MDth/dof certificated capacity will not interfere with Trunkline’sability to transport its post-abandonment projections of contractdemand,” the order said. “Moreover, if needed, there arealternative pipeline transporters available at receipt/deliverypoints along Trunkline’s system. Thus, no shipper should bedeprived of transportation service as a result of the abandonment.”

Ironically, the very shippers that are protesting theabandonment only want Trunkline’s capacity if it is available on aninterruptible basis at discounted rates, the order noted. “Suchpreference indicates that those customers do not highly valueTrunkline’s capacity.”

Claims that the abandonment would put upward pressure ontransportation rates also were rejected. “The capacity proposed tobe abandoned is neither substantial in relation to Trunkline’ssystem or the entire Midwest market, nor highly valued byTrunkline’s customers. ” Consequently, it “should have nomeasurable effect on Trunkline’s jurisdictional transportationrates,” the order said.

Under its proposal, the 26-inch diameter Line 100-1 (one ofthree loops to Trunkline’s mainline) is scheduled to be taken outof gas service on April 1 of this year, with deliveries to thepipeline’s remaining customers to continue over loop Lines 100-2and 100-3.

CMS Trunkline Pipeline Holdings and partners – Ashland PetroleumLLC and Texas Eastern Products Pipeline Co. LP (TEPPCO) – will pushahead to convert the line to a liquids petroleum products service.The three will have an equal interest in a limited liabilitycompany, which will own and operate the converted line. Thepartners will pay an estimated $10 million for the abandoned Line100-1 and to reconnect Trunkline’s remaining two loop mainlines.They expect the conversion to be completed later this year.

The joint venture intends to build a 70-mile, 24-inch diameterpipeline connecting TEPPCO’s facility in Beaumont, TX, with thestart of the converted pipeline extending from Longville, LA, toBourbon, IL. The line, called Centennial Pipeline, will passthrough portions of seven states — Texas, Louisiana, Arkansas,Mississippi, Tennessee, Kentucky and Illinois. The CentennialPipeline will intersect with TEPPCO’s existing mainline near LickCreek, IL, where a new two-million-barrel refined petroleumproducts storage terminal will be built.

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