FERC yesterday gave the go-ahead for Equitrans L.P. to acquireall but 26 miles of a 121-mile gas pipeline from Three RiversPipeline Co., a subsidiary of Equitable Resources Inc. Equitranswill purchase the facilities for their net book value of $4.2million.

Three Rivers, a converted oil products pipeline, stretches fromMidland, PA, to Altoona. It interconnects with National Fuel GasSupply Corp. at Midland and has delivery points with ColumbiaTransmission Corp., Texas Eastern Transmission and Peoples NaturalGas at McKeesport and Altoona. The pipeline has a daily systemdesign capacity of 30,000 MMBtu/d and an annual system designcapacity of 10.95 BBtu/d.

The 26-mile segment of the pipeline was excluded from the dealbecause Three Rivers has an agreement to lease firm capacity toPeoples on that portion of the system until 2003. The 10-year leasealso gives Peoples the option to buy the 26-mile segment when theagreement expires.

Since Equitrans and Three Rivers interconnect near Pittsburgh,PA, Equitrans said the acquisition would give its customers greateraccess to Canadian gas supplies via new receipt and delivery pointson Three Rivers.

Duke Energy Trading and Marketing LLC is the only firmtransportation customer on the Three Rivers’ lateral. Equitranssaid it would continue to serve Duke Energy, which has contractedfor a maximum of 40,000 MMBtu/d until October 2002.

FERC said Equitrans could roll in the acquisition costs in itsnext general rate case. “Since Equitrans demonstrates that itscurrent customers will not subsidize Equitrans’ acquisition whichbenefits those customers, [its] request for rolled-in pricing inits next general rate proceeding is granted, barring a change inmaterial circumstances,” the order issuing a certificate said[CP00-35]. “A material change in circumstances would include asituation in which the Duke contract ends without replacementvolumes…”

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