Apparent soft demand in the Mid-Atlantic market has forced Greenbrier Pipeline Co. LLC to ask FERC for a two-year extension to build and put into operation its proposed 279-mile pipeline that’s intended to serve local distributors and power generators in the region. This comes after Greenbrier announced an indefinite delay of the project in November.
The FERC certificate for the project, which was issued in April 2003, required Greenbrier to have the pipeline in service by Nov. 1, 2005. It also required the company to have firm, long-term agreements for 90% of the transportation capacity to be created by the project in hand before undertaking construction of the proposed line.
In a letter to the Commission last Wednesday, Greenbrier said it was requesting the extension to ensure that the pipeline facilities are constructed in “close coordination with demonstrated market requirements.” It noted that it has taken “extensive measures” to “develop the market commitments needed to support the additional pipeline capacity required in this region.” The company gave no hints that it may deep-six the project.
With a limited capital budget for pipeline construction, Greenbrier indicated that its parent company, Richmond, VA-based Dominion Resources, was forced to choose between the $497 million pipeline project or its recently revived Cove Point LNG terminal in southern Maryland. Dominion “has continued to pursue the expansion of the Cove Point facility,” it told FERC [CP02-396].
Questions about market need have dogged the Greenbrier project from the very start. Before awarding a certificate last April, the Commission had ordered Greenbrier to justify the market need for the pipeline after hearing reports that proposed generation facilities to be served by the project might be canceled.
At the time, Dominion tried to douse the agency’s concerns, assuring it that 540,000 Dth/d of the 600,000 Dth/d of capacity to be created by the project was under precedent agreements. It reported that only one power generation developer — Mirant Americas Development Corp. — had backed out of its agreement for service on the proposed pipeline (see NGI, April 7, 2003).
But the situation changed by late 2003. Dominion put the proposed Greenbrier pipeline on hold by then, noting that several of the power plant projects that had committed to transportation capacity had been called off.
The proposed pipeline is designed to originate at Dominion’s Cornwell Station in Kanawha County, WV, with interconnections to Dominion Transmission and Tennessee Gas Pipeline, and to extend through southwestern Virginia into Granville County
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