FERC issued final certificates last week to the Maritimes & Northeast Pipeline Phase III expansion project and the related HubLine expansion by Algonquin Gas Transmission. The integrated expansions will increase transportation of Atlantic Canadian gas to the Boston area. In addition, New York gained significant new transportation capacity with a FERC certificate for Iroquois’ Eastchester project to New York City and a favorable preliminary determination on non-environmental issues for Islander East Pipeline Co. LLC’s 40-mile pipeline from Connecticut to Long Island, NY.

The $174 million Eastchester project will add 230,000 Dth/d of capacity to the Iroquois system to increase deliveries mainly to New York City power generators. The Federal Energy Regulatory Commission denied rolled-in rate treatment for Eastchester, stating that, contrary to Iroquois’ claims, the project’s cost actually would exceed its revenues, requiring existing firm shippers to subsidize a portion of the project. Iroquois had said the project would provide $2.8 million in annual net financial benefits, but FERC found that it actually would cost existing shippers $2.9 million. As a result, the Commission left the rates to be settled in a future proceeding.

The Eastchester Expansion will be the first new interstate pipeline built into New York City in about 40 years, and will serve power generation and other needs, Iroquois said. It includes a 36-mile pipeline from Northport, NY, to Hunts Point in the Bronx; a second unit at the company’s Croghan, NY, compressor station; new compressor stations at Boonville and Dover, NY; cooling units at Athens and Wright, NY; and equipment upgrade at Wright, NY. Iroquois expects to begin construction on the New York state facilities in spring 2002, and the marine pipeline by fall 2002, with the whole Eastchester Expansion to be placed into service in the winter of 2002-2003.

It signed 10-year precedent agreements for the capacity with five shippers: Virginia Power Energy Marketing (20,000 Dth/d), Mirant New York Management (60,000), KeySpan Ravenswood (60,000), Consolidated Edison Energy (30,000) and Orion Power Holdings (60,000). ConEd, KeySpan and Orion will use their capacity to serve power generation load. FERC also said the pipeline must finalize its agreements with shippers prior to moving forward with construction.

Iroquois Gas Transmission System is a partnership of 10 U.S. and Canadian energy firms and is owner of a 375-mile interstate pipeline extending from the U.S.-Canadian border at Waddington, NY, through western Connecticut to Long Island, NY.

The companion expansion projects of Maritimes & Northeast and Algonquin call for Maritimes to construct an extension in a southeasterly direction through several Massachusetts counties to the East Coast where a new Algonquin line would connect and extend offshore down the coast through Boston Bay to a connection with Algonquin’s existing system at Weymouth on the south side of Boston Harbor. The two pipeline projects are designed to supply up to 230,500 Dth/d to the gas-starved New England region and are targeted for service by November 2002.

The so-called Phase III extension of the 600-mile Maritimes pipeline, which imports Atlantic Canadian gas to the Northeast from the Sable Offshore Energy Project offshore Nova Scotia, will include 24 miles of 30-inch diameter pipeline and one mile of 24-inch diameter pipeline, extending from Methuen, MA, through a number of counties to a connection with Algonquin’s proposed extension in Beverly, MA. The project, which has an estimated price tag of $133.9 million, would provide firm transportation service to serve growing markets on the east end of Algonquin’s system.

Algonquin’s HubLine project, which has a projected cost of $127 million, will include about 29 miles of 24-inch diameter pipeline, extending offshore from an interconnection near Beverly with Maritimes’ proposed Phase III project to an interconnection with Algonquin’s existing I-9 lateral in Weymouth. Algonquin also plans to build a 5.4-mile, 16-inch diameter lateral from the proposed pipeline to a wastewater treatment plant owned by Massachusetts Water Resources Authority on Deer Island.

Duke Energy Gas Transmission (DEGT) and KeySpan Energy Delivery Long Island (KEDLI) first announced the Islander East project in January. Originating from Algonquin’s system, the pipeline — made from 24-inch and 30-inch diameter pipe — would extend from Connecticut across Long Island Sound to Wading River, NY, and other points on Long Island, where it would connect with KEDLI. The companies believe the time is right for Islander East because it would have access to almost every major supply basin in North America, including the Sable Island project off the coast of Nova Scotia through HubLine, Algonquin’s proposed interconnection with Maritimes. The companies said that they expect to have the pipeline operating in 2003, initially providing 250,000 Dth/d of natural gas to the Long Island and New York City energy markets, enough to heat 600,000 homes.

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