The Portland Natural Gas Transmission System (PNGTS) andTransQuebec & Maritimes Pipeline (TQM) held a ribbon-cuttingceremony yesterday at the U.S./Canada border to announce completionof the first high-capacity gas pipeline to serve northern NewEngland. Commercial operations, however, are not expected to beginuntil March 6. And PNGTS probably will not be transporting its fullcertificated capacity of 178,000 MMBtu/d until the end of the year,said spokesman John Flumerfelt, because several of the power plantsand paper mills to be served by the pipeline are not completed.

The pipeline is in good shape, however, compared to itscompetitor the Maritimes & Northeast Pipeline, with which PNGTSjointly owns and operates about 100-miles of pipe extending fromWestbrook, ME, north of Portland to a connection with Tennessee Gasin Dracut, MA. The Maritimes project is being revamped because ofthe loss or delay of numerous U.S. markets and the growth ofmarkets north of the border in Canada. Out of the 17 shippers onboard when the Maritimes’ project was approved by FERC, only fourremain.

“Having a pipeline complete always puts you in real good shape,”Flumerfelt noted. “We have solid customers, a good end-use market.”PNGTS has signed long-term transportation contracts with eightshippers, including paper mills, power plants, gas utilities andthird-party marketers. Meanwhile, Maritimes has struggled to lineup New England markets. Flumerfelt attributes PNGTS’ success to anumber of factors, not least of which is just plain luck.

“Every customer up here is different,” he said. “PNGTS’ shippersall have different reasons for converting to gas. Some are purelycost-based and they are looking to gas to save money. Othercustomers have an environmental compliance issues they are tryingto address, or they’re trying to obtain process improvements intheir facility. I think PNGTS was fortunate to have a couple bigpaper mills that we just caught at the right time. They had a goodand timely reason to switch to gas.”

International Paper, which is using PNGTS transported gas tofuel a new cogeneration facility that’s being built on site,intends to reap significant environmental benefits. Mead Corp. islooking for environmental benefits as well as process improvements.Wasau Paper in New Hampshire was under an environmental compliancemandate from the state. For Wasau, it was either clean up airemissions or be shut down or fined.

In contrast, Maritimes potential customers for whatever reasondidn’t have that urgency to switch to gas. Low fuel oil pricesdidn’t help. Most of the gas entering the New England market willbe displacing fuel oil or replacing gas (35 MMcf/d) transported onthe Portland Pipe Line, which is being converted back to oiltransportation. Some of Maritimes laterals also were too long andtoo expensive.

“We looked at some of those markets as well and they seemeddifficult to justify,” said Flumerfelt. “An 80-mile lateral toserve a relatively small paper mill load is difficult to justifyeconomically. The load doesn’t cover the cost of facilities.”

Maritimes’ biggest customer was going to be Central Maine Power,which planned to do a conversion at an oil-fired power plant (theWyman station) but then was required by the legislature to sell itsassets. The potential buyer of those CMP assets, FPL, now is tryingto get out of the purchase.

In the meantime, PNGTS is already thinking expansion. “You’vegot 2,300 MW of high-efficiency combined cycle gas-fired powergeneration permitted in Maine and 900 MW of that is underconstruction. Only one of the five plants, a Duke Energy powerplant, is on Maritimes. The rest are either on PNGTS or the jointpipeline south of Westbrook, ME,” said Flumerfelt.

The PNGTS project includes 292 miles of 24- and 30-inchmainline, including 50 miles of variously sized laterals to providenew and expanded service to contiguous market areas in NewHampshire and Maine. In Canada, the TQM Extension includes 136miles (217 km) of 24-inch mainline between Lachenaie and EastHereford, Quebec.

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