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FERC: Trans-Union Can’t Build Single-Use Line
FERC slapped the proposed Trans-Union Interstate Pipeline withsomething of a double-edged sword yesterday. While it issued acertificate for the 42-mile, 430,000 Dth/d pipeline project, itdenied its request to operate it as a single-use line.
In response to a “limited protest” filed by Lion Oil Co., theCommission held that “in light of [its] current policy not to issuecase-specific, Part 157 transportation certificates and consistentwith recent Commission decisions, any certificate issued toTrans-Union to construct and operate its proposed pipeline will beconditioned on Trans-Union’s filing with the Commission, within 120days…, an application for a Part 284 blanket transportationcertificate, along with an open-access tariff and Part 284 rates.”
Trans-Union proposed the line to serve only one facility — agas-fired 2,700 MW power generation plant to be constructed byaffiliate Union Power Partners near El Dorado, AR. When completed,it would be one of the largest generation plants in the nation. Theproposed line would extend from an interconnect with the facilitiesof Texas Gas Transmission at the Sharon Compressor Station inClaiborne Parish, LA, to a new delivery point in Union County, AR,where the gas would be delivered to Union Power’s generationfacilities. Union Power has committed itself to most of thecapacity under a 30-year contract.
Dallas-based Panda Energy, parent of Trans-Union and UnionPower, said it decided to build the line only after it consideredand rejected several gas transportation proposals that weresubmitted by Reliant Energy Gas Transmission. Panda Energy notedthat it found the existing pipelines too small to meet the gasrequirements of Union Power’s generation plant.
Lion Oil, which operates a refinery in El Dorado, protestedTrans-Union’s proposal to build the pipeline as a single-use line,saying that it desired to be a shipper on the new facility. Itwould provide it with a competitive alternative to Reliant, and itwould cost less to access supplies through the Trans-Union line,Lion said. The refiner historically has received up to 12,500MMBtu/d of firm service from Reliant, but its contract demand wascut back to 9,500 MMBtu/d last April.
The Commission said it wouldn’t require Trans-Union to hold anopen season for capacity on the line “since it appears that Lion isthe only third-party shipper potentially interested in service atthis time.” Nor does it think it’s necessary for Trans-Union torevise its proposal to increase capacity on the line.
Given that Union Power has indicated it will only need 340,000MMBtu/d of the planned 430,000 MMBtu/d of capacity during the firstphase of its operation, “it appears that there would be capacityavailable on Trans-Union to provide a firm service for Lion atleast in the short term,” the order said [CP00-47].
In fact, FERC noted that an analysis conducted by itsengineering staff of the maximum capacity of the system under 785psig pressure demonstrated that Trans-Union will have the capacityto transport 440,000 MMBtu/d. “Thus, it appears that Trans-Unioncan accommodate Lion’s potential service requirement of 9,500MMBtu/d.”
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