Despite falling gas prices, declining demand and increasing production, the rush is still on to bring more liquefied natural gas (LNG) to the United States. Two El Paso Corp. subsidiaries are conducting separate open seasons to determine non-binding customer interest in transportation capacity on pipelines that will transport natural gas from El Paso Global LNG’s planned terminal on Grand Bahama Island to Florida.

The terminal would be one of three proposed LNG facilities in the Bahamas. Enron already has a similar pipeline proposal on file at the Federal Energy Regulatory Commission (FERC) and is planning its own LNG terminal offshore Florida (see Daily GPI, July 30). In addition late last month AES Corp. bought a 90-acre island in the Bahamas on which it plans to build its own LNG terminal with a related pipeline to the Florida coast (see Daily GPI, Sept. 20).

All three proposals are of similar size and would serve rapidly growing power generation demand in Florida and the Southeast. El Paso’s 24-inch diameter pipelines would have the capacity to deliver up to 800 MMcf/d of natural gas to affiliate Florida Gas Transmission (FGT) on the coast. It is expected to be in service in the summer of 2004.

Bahama Cay Pipeline System Ltd., a Bahamian pipeline subsidiary of El Paso, is conducting an open season for transportation capacity on Bahama Cay International Pipeline, an 88-mile pipeline that will transport regasified LNG from the planned terminal to the boundary of the U.S. Exclusive Economic Zone (EEZ). Meanwhile, ANR Southern Pipeline Co., a domestic pipeline subsidiary of El Paso, is conducting a separate open season for transportation capacity on Bahama Cay Pipeline System, a 37-mile pipeline that will deliver natural gas from an interconnection with the Bahama Cay International Pipeline at the boundary of the EEZ to onshore Florida near the Port of Palm Beach. From there, it will extend to interconnect with shipper facilities and with FGT. The majority of this domestic pipeline will be located offshore, and it will be regulated by FERC.

Florida’s incremental installed gas-fired power generation facilities are projected to increase by over 11,000 MW by the end of 2005, based on the 2001 Ten Year Site Plans filed by Florida’s generation utilities. This projected demand for power fueled by clean-burning natural gas will require over 2 Bcf/d of additional delivery capacity and gas supply, El Paso noted. However, there will be a significant battle for markets among these LNG projects. An overcapacity situation looms in the state with the three 800 MMcf/d pipelines proposed from the Bahamas, the new 1.1 Bcf/d Gulfstream Pipeline across the Gulf of Mexico and the significant expansions proposed by FGT.

For more information on El Paso’s open seasons, which will be held through Oct. 26, contact Allen Kelley at (832)-676-2531 (or via e-mail at allen.kelley@elpaso.com) or Stan Babiuk at (832)-676-2535 (or via e-mail at stan.babiuk@elpaso.com).

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