If FERC should issue an unfavorable rehearing decision on theproposed MarketLink expansion, a Williams official yesterday saidthe company will ask FERC to sever the project from the proposedSupplyLink expansion and Independence Pipeline projects.

“I think if we don’t [get] some relief in rehearing on some ofthe conditions” imposed by the Commission on MarketLink, “we willhave to do that,” said Jamie Craddock, manager of projectdevelopment for Williams Gas Pipeline-Transco, at GasMart/Power2000 in Denver, CO.

The controversial MarketLink project, which seeks to expandTransco’s system in Pennsylvania and New Jersey, has been heavilyprotested by landowners in both states. New Jersey Gov. ChristineWhitman has threatened to go to court to halt the project.

In mid-December, the Commission issued an interim order thatapproved MarketLink, SupplyLink and Independence on the conditionthat the latter two projects would provide FERC with proof offurther market showing, which they haven’t done yet. Transco alsois a sponsor of the proposed greenfield Independence line.

“We filed for rehearing on issues that we felt significantlyimpacted our ability to…build the projects,” Craddock noted.There were “conditions put on those certificates that hadn’t beenseen by other projects before,” she said, calling them”unimaginable.”

The “main [issue] that we were having difficulty addressing wasthat all three projects had to receive every permit” before anyconstruction could begin, Craddock noted. Also, she said Transcobelieves marketing-affiliate contracts are as much a proof ofproject demand as non-affiliate contracts. Both types of contracts”need to get the same treatment” at FERC.

She further stressed that while SupplyLink and Independence”complement” the MarketLink expansion project, they are “not fullynecessary” for it. MarketLink could receive gas supplies fromCanada and the Midwest from existing pipelines, she said.

Craddock also criticized the Commission’s new policy on pipelinecertificates, which requires a new project’s benefits to outweighthe adverse effects on the environment, landowners and existingpipelines in order to win certification.

“It’s going to be hard to achieve this balance [of interests]when you have divergent positions and competing interests all kindof sitting at the table,” she said. Craddock sees the policystatement increasing the intial costs of pipeline projects anddelaying projects.

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