Southern LNG’s proposed enhancements to its Elba Islandvaporization facilities were granted preliminary approval onnon-environmental grounds by FERC yesterday. Southern plans toremove five existing vaporizers and replace them with moreefficient ones, resulting in increased send-out capability to 675MMcf/d from 540 MMcf/d at a cost of $14 million. Southern’s onlycapacity holder, El Paso Merchant Energy, will pick up the tab.
FERC also granted Southern’s request for clarification that itscertificate not limit its ability to import LNG from sources otherthan Trinidad, which was specified in the original order approvingrecommissioning. The Elba Island terminal is scheduled to be inservice in October.
FERC issued its certificate on the facility in March 2000,authorizing Southern to construct new facilities and to repair andupgrade existing facilities in order to be able to provide storagefor 4 Bcf of liquefied natural gas and to send out vaporized gas onan average design basis. As a result of an open season, El PasoMerchant Energy contracted for the entire 100% of the capacity atthe facility.
Enron LNG protested the certificate and came to an agreementwith Southern that led to the proposed modifications to Southern’svaporization facilities. The proposed modifications will increasesendout to 160 Bcf/year from 85 Bcf/year. According to Southern, ElPaso Merchant Energy has agreed to import LNG purchased from Enronand Point Fortin LNG Exports Ltd that will come from a variety offoreign sources and will have various heating values. Southernplans to reduce the heat content of the LNG to a standard level byblending the LNG with gas in Southern’s LNG facilities or in thefacilities of its pipeline affiliate, Southern Natural Gas.
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