A week after expressing doubts about the existing market support for the project, FERC last Wednesday awarded a certificate for the construction of the $497 million Greenbrier Pipeline to serve industrial and residential gas needs in the Mid-Atlantic and Southeast regions, primarily Virginia and North Carolina.

The Commission issued the certificate only after Dominion Transmission Inc., the majority partner in the project, assured the agency earlier this month that approximately 90% of the transportation capacity to be created by the proposed natural gas pipeline was subscribed by power generators and local distribution companies (LDCs) under precedent agreements.

As a condition to the project’s certificate, however, FERC said Greenbrier must convert the precedent agreements to firm contracts for 90% of the project’s capacity prior to the start of construction. “This condition provides the assurance that the project will not proceed without contractual support,” last week’s order said [CP02-396].

Based on Energy Information Administration (EIA) projections, the order said it was “abundantly clear” that additional pipeline capacity will be needed in the years ahead to meet expected growth in gas and electricity consumption in the Mid- and South Atlantic regions. The EIA predicts gas demand in the South Atlantic region alone will increase from 1.615 quadrillion Btu in 2003 to 2.22 quadrillion Btu in 2020.

Because Greenbrier Pipeline took advantage of the pre-filing process under the National Environmental Protection Act (NEPA), FERC staff estimated that as much as seven months were shaved off the typical 16-18 month certificate process. FERC Chairman Pat Wood called the seven months a “conservative” figure, given that many pipeline project applications are contested and tend to drag out.

The proposed 279-mile pipeline would deliver gas to at least three gas-fired power generation facilities, two LDCs and one marketer in the Mid-Atlantic and Southeast. The delivery capability of the line was estimated at 600,000 Dth/d, of which 540,000 Dth/d was under precedent agreements, according to Dominion Transmission.

The pipeline would originate in Kanawha County, WV, with interconnections to Dominion Transmission and Tennessee Gas Pipeline, and extend through southwestern Virginia into Granville County, NC. Dominion Transmission has a 67% ownership stake in the project, while Piedmont Natural Gas has a 33% interest. Piedmont serves more than 700,000 LDC customers in North Carolina.

FERC staff noted the project would offer greater supply diversity and competition in the region. Supplies delivered from Dominion Transmission and Tennessee into the Greenbrier system near Charleston, WV, would come from the Appalachian, Canadian, Gulf Coast and Mid-Continent regions or storage facilities operated by Dominion.

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