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Tennessee, CNG Join East-Bound Bandwagon
As if its plate weren’t already full, “the market” received another East-bound pipeline project to “sort out” with the announcement of El Paso Energy’s Tennessee Gas Pipeline and Consolidated Natural Gas’ CNG Transmission Atlantic Alliance Project. Atlantic Alliance would transport up to 750,000 Dth/d from the Chicago market center and the Niagara Import Point in upstate New York into eastern markets.
Atlantic Alliance would combine existing facilities and rights-of-way with construction of incremental facilities. Construction would be phased to correspond to service requests. However, the full 750,000 Dth/d could be available as early as Nov. 1, 2001.
“With the Atlantic Alliance, Tennessee and CNG are able to capture operational efficiencies between their systems to offer a competitive service that can be phased in as the market evolves,” said Tennessee President John Somerhalder. With the uncertainties that exist in today’s market, the Atlantic Alliance represents a rational way to address growth as it occurs.”
Mike Stokdyk, manager of project development for Tennessee Gas Pipeline, said Atlantic Alliance’s competitors in part are greenfield projects Independence (ANR Pipeline, National Fuel Gas Supply and Transco), and Millennium (Columbia Gas Transmission, TransCanada PipeLines, Westcoast Energy and MCN Energy Group), and the Spectrum program (Texas Eastern Transmission, a Duke Energy affiliate), which would make use of existing capacity.
The FERC in March bypassed preliminary determinations (PDs) for four pipeline projects to the Northeast due to questions about the “need” for them (See NGI March 15, 1999). The Commission is slated to discuss a policy statement at this week’s meeting which, sources say, will seek a process for examining competing projects. (See story, this issue)
Stokdyk said Atlantic Alliance has an edge because it would expand existing pipe through looping and compression, which is less likely to rile landowners.
“Basically, the timing [for Atlantic Alliance] appears to be somewhat important in that the competition is seeking to receive FERC approval and we do see some markets starting to develop,” Stokdyk said. “The power generation in the New York area is kind of in the infancy of some incremental development. It’s good timing from that standpoint. Before some of the competition is certificated, we just want to make sure that any of the potential market is aware of all the alternatives available to it.
“The main thing that we feel we have an advantage in is basically being able to build as the market needs it. We don’t believe that there will be 600 MMcf/d or a Bcf a day cropping up overnight to fill a new pipeline.”
Atlantic Alliance would target developing markets in New York, Pennsylvania, and New England. The Atlantic Alliance rate from Chicago to western New York or Pennsylvania would be about 47 cents/Dth. Because it would use existing facilities, Atlantic Alliance would be able to offer service quickly, with 100,000 Dth/d available this winter. An open season is planned for August.
Joe Fisher, Houston
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