Trunkline Gas Co. has indicated it has “entered into discussionswith several parties” to either sell or spin down one-third of itsmainline system – about 720 miles – for the purpose of convertingthe facilities for the transportation of refined petroleumproducts.

Trunkline first proposed spinning down this segment of itspipeline [Line 100-1], which spans from Illinois to Louisiana, toan affiliate, Trunkline A.P. Pipeline Co., in July 1998 (when itstill was owned by Duke Energy). Since then, however, Trunkline’sownership has changed hands, with CMS Energy buying it in March.And the pipeline now is negotiating with various, possibly outside,parties that are interested in the facilities.

“Trunkline is in advanced negotiations, which would result inthe conversion of these pipeline facilities for the transportationof refined petroleum products. Negotiations will be concludedwithin the near future…,” wrote Trunkline President and CEOChristopher A. Helms in an Oct. 27 letter to FERC. Depending on theprogress of the negotiations, he said the pipeline either willamend its July 1998 proposal by Dec. 15 or it will “withdraw itsapplication.”

Trunkline sent the letter to the Commission after it failed tofile “definitive modifications” to its proposal by Oct. 15, as itpreviously had promised.

John Barnett, a spokesman for CMS Energy, declined to say howmany parties Trunkline was negotiating with, but he did say it wasmore than one. Nor would he confirm whether Trunkline was planningto sell or spin down the facilities, as initially was planned.

Under the 1998 proposal, Trunkline A.P. would oversee theconversion of the facilities to transport ethane and hydrocarbonvapors to the Gulf Coast from the proposed Aux Sable LiquidsProducts processing plant, which is being constructed at theterminus of the 1.4 Bcf/d planned Alliance Pipeline. The spin-down,as originally was proposed, would reduce Trunkline’s systemcapacity of about 1,810 MDth/d by 255 MDth/d, or by 14%.

Trunkline cited years of underutilization and deep discountingthe likelihood of continued decontracting when it announced itsintention to shed itself of the 26-inch diameter mainline.”Essentially, the situation is the same today” as it was in July1998, Barnett told NGI. “That’s why we’re pursuing an alternate usefor the line…”

Trunkline shippers are opposed to the pipeline’s move. Manyconsider Trunkline’s system still to be a key link in the Midwestgas pipeline grid, even in light of all the new pipelineconstruction coming into that market.

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