The Georgia Public Service Commission (PSC) has approved Atlanta Gas Light’s (AGL) most recent Capacity Supply Plan (CSP), which includes a proposal to provide gas from the liquefied natural gas (LNG terminal at Elba Island, near Savannah, to Georgia customers through a series of pipes, some owned by Southern Natural Gas (SNG).

By a 3-2 vote the PSC Sept. 27 approved the CSP, including the Elba Island-to-Atlanta plan that will eventually provide approximately 3% of AGL’s supply. AGL developed the plan to diversify its supply sources. Currently, most of the company’s capacity comes from the Gulf of Mexico. Developing the new route will cost an estimated $43 million, which AGL will recover through gas capacity charges. A previous pipeline construction plan, which died last year when Georgia lawmakers failed to approve required legislation, would have cost approximately $300 million.

AGL has negotiated with SNG to participate jointly in an effort to provide firm transport from Elba into the Georgia Market using portions of SNG’s Cypress expansion project, which is currently being developed, and other existing SNG facilities (see NGI, Sept. 24). AGL plans to bring gas down the Cypress Pipeline to its own Brunswick lateral pipeline, then north into Lawrence County where it will enter SNG’s south mainline in Jones County and on into Atlanta. The new route will belong to a new AGL subsidiary, Magnolia Holdings, and will be managed by SNG.

The PSC approved the plan contingent upon AGL filing with FERC a pregranted abandonment petition of the Brunswick lateral, and upon AGL and Magnolia’s agreement that Magnolia will sell the lateral back to AGL at net book value at the end of the 15-year lease term if AGL does not extend the agreement under its right of first refusal. If the Federal Energy Regulatory Commission (FERC) does not grant the abandonment petition, or if the rate AGL is offered is not based on net book value, AGL will impute as a writedown to its rate base the difference between the market value of the route at that time and the net book value, the PSC said.

In April, FERC gave El Paso Corp. subsidiary SNG authorization to begin service, including interconnection and measurement facilities with AGL in Glynn County, GA, on its Cypress Pipeline project, which provides a direct corridor for deliveries of gas from the Elba Island LNG terminal to the northern Florida market (see NGI, April 30).

On Sept. 20 FERC issued a certificate allowing SNG and two other El Paso Corp. affiliates to double the storage and sendout capacity of Southern LNG’s import terminal on Elba Island and build a new gas pipeline to move nearly 1.2 Bcf/d of revaporized LNG to growing Southeast markets (see NGI, Sept. 24). That pipeline, which is estimated to cost $62.6 million, will have a quarter-mile, eight-inch diameter lateral connecting it with the Formosa Hydrocarbons Co.; and would transport gas to four intrastate pipelines and five interstate pipeline, including Florida Gas Transmission, Gulf South Pipeline, Natural Gas Pipeline Company of America, Transcontinental Gas Pipe Line and Tennessee Gas Pipeline.

©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.