The Federal Energy Regulatory Commission (FERC) announced lastweek it wants to hold a half-day public conference Sept. 29 toaddress the “steady flow” of Congressional inquiries into theIndependence and MarketLink pipeline projects. The conference willbe used to gather “supplemental information” on the market need forthe projects but the Commission said it does not intend to reopenthe record on them.

Nevertheless, it is becoming a real nail-biter for projectsponsors. If the projects are not approved by this fall, sponsorssaid they will be hardpressed to meet their in-service dates ofNovember 2000. A Williams spokesman said the company, which is asponsor in both projects, sees “no reason to believe this[conference] will delay the timing of the certificate.” He alsonoted that “all of our business planning has been done based on afall certificate. If we don’t get it this fall, adjustments willhave to be made.”

Concerns over the Independence and MarketLink projects wereclearly evident at the 11th annual LDC Forum in Chicago, IL, lastweek. Midwest gas buyers wanted to know why Williams was rollingthe pipe for MarketLink, but not for Independence. Did this meanthat the company was more certain that FERC would approveMarketLink? they asked.

“Independence has its orders in at the pipe mill and we have ourspace reserved. [But] we are not currently rolling pipe forIndependence. When you have projects as large as MarketLink andIndependence that require [such a huge] amount of pipe…..someonehad to go first,” and it was MarketLink, said Jamie Craddock,manager of project development-northern markets for Williams GasPipelines-Transco.

The gas buyers also wanted to know whether Williams wouldproceed to build MarketLink if Independence is stalled at FERC.”With MarketLink, we are making commitments to our shippers – quitea few of which are generators – that we will meet their in-servicedates. If there is – and I’m stressing if – a displacement ofin-service dates, if MarketLink has to go into meet commitmentsbefore Independence, we’re prepared to provide a bridge service forour shippers until Independence is constructed,” she noted.

Craddock further was asked whether Williams and its partnersstill planned to construct Independence – given that its proposedrates were three times the current Chicago-New York basisdifferential. “First of all, I don’t think it’s three times thedifference,” she noted. “I also think you’re going to see the basischange as the market develops. If there is strained demand alongthe East Coast, I would expect [the] basis to increase from whereyou see it now.

But I also think that people cannot expect the basis torepresent the entire value of holding long-term capacity. But yes,when we get our certificate on Independence, I don’t think anyonewithin our partnership thinks the basis is going to match ourrates, and we still plan on building our project,” Craddock said.Both Craddock and Cuba Wadlington Jr., also of Williams, indicatedthey are expecting the Commission to address the Independence andMarketLink projects sometime in the October-November timeframe.

The Independence and MarketLink projects, which FERC considersone system designed to bring about 1 Bcf/d of gas from Defiance,OH, (ultimately from Chicago through interconnections with otherpipes) to New York City, amount to nearly 1,000 miles of newpipeline and looping. It’s clearly going to take every bit of timeavailable to meet their deadlines.

In announcing the half-day conference, FERC made no mention ofthe competing Millennium project, indicating that heavy politicaland landowner pressure on Independence and MarketLink could begiving Millennium the edge. Millennium would extend from aconnection with TransCanada in Lake Erie to New York City. Despitethe Commission’s earlier decision to group the projects and examinethem, leading observers to wonder whether they may be combined, itnow appears the Commission could be favoring Millennium over theothers.

Those wishing to participate in the public conference on theprojects should submit a written request to the Secretary of theCommission by Sept. 21. FERC indicated it was “particularlyinterested in hearing from elected officials concerning theiranalysis and views [on] the project.” The deadline for the filingof written comments is 15 days after the conference. RoccoCanonica, Washington, D.C.;

Susan Parker, Chicago

©Copyright 1999 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.