Challenge

In light of expanding markets being served by El Paso NaturalGas’ South Mainline, East-of-California (EOC) shippers haveexpressed concern with the pipeline’s “Line 2000 Project” in whichit seeks to abandon six aging compressor facilities and replacethem with nearly 785 miles of converted line that would loop muchof its southern leg. The rub is that the proposed project,essentially a one-for-one swap, is not expected to create any newcapacity, yet El Paso is looking for its shippers to foot the tab.

In light of expanding markets being served by El Paso NaturalGas’ South Mainline, East-of-California (EOC) shippers haveexpressed concern with the pipeline’s “Line 2000 Project” in whichit seeks to abandon six aging compressor facilities and replacethem with nearly 785 miles of converted line that would loop muchof its existing system. The rub is that the proposed project wouldnot create any new capacity.

Although U.S. Energy Secretary Bill Richardson has been soundingthe alarm all over the country about problems with the nation’selectric reliability because of at least six power outages thatoccurred last summer, several utility executives told the secretarylast week at a regional “summit meeting” in Newark, NJ, that theyare ready and waiting for the next summer demand peak.

Although U.S. Energy Secretary Bill Richardson has been sendingup red flags all over the country about problems with the nation’selectric reliability because of at least six power outages thatoccurred last summer, several Mid-Atlantic utility executives toldthe secretary yesterday at a regional “summit meeting” in Newark,NJ, that they are ready and waiting for the next summer demandpeak.

The Independent Petroleum Association of America is suing theU.S. Department of the Interior to challenge its new oil royaltyvaluation regulation. The regulation creates new methods of valuingroyalties on oil from federal leases and takes effect June 1.

In its effort to meet the challenge of building a pipeline offthe Florida coast, Buccaneer Pipeline project sponsors saidyesterday they signed Saipem Inc./European Marine Contractors Ltd.to help construct the offshore portion of the proposed pipeline.Buccaneer, which is a joint venture between Duke Energy andWilliams, would not disclose any of the financial agreementsinvolved in the deal. Saipem/EMC has already started work on theproject, a Buccaneer spokesperson said.

Wisconsin Gas fired back at the latest ANR challenge to theGuardian Pipeline project to serve the Wisconsin market. The companytook issue with an ANR press release of last week (see Daily GPI, Feb. 15). The release challenged Guardianto release detailed information about its costs and rates and said theproject was not competitive with alternatives following a presentationto a state business group.

Coastal’s ANR Pipeline is continuing its battle against aproposed pipeline that would challenge its dominance of theWisconsin market. ANR is calling for backers of the GuardianPipeline project to make costs of the project public to provewhether it would reduce Wisconsin gas prices.

Making use of extra capacity, three pipelines are collaboratingto provide additional transportation between Chicago and Dawn,Ontario, this winter. If their capacity offering generates enoughinterest among shippers, the three could make the offering everywinter, creating a competitor to the planned Vector project.