Eastern Shore Natural Gas seeks FERC nod on pipeline for Calpine power project

Eastern Shore Natural Gas Co. on Nov. 21 applied with the Federal Energy Regulatory Commission for a gas pipeline to serve a new Calpine Corp. (NYSE: CPN) power plant in Delaware.

Eastern Shore is requesting a certificate of public convenience and necessity authorizing it to construct, own, operate and maintain the White Oak Mainline Expansion Project. This project consists of approximately 7.2 miles of 16-inch diameter pipeline looping and appurtenant facilities, and 3,550 hp of additional compression at Eastern Shore’s existing Delaware City Compressor Station.

Eastern Shore proposes to construct the project in order to provide 45,000 dekatherms per day (dt/day) of Off Peak ≤90 (“OPT≤90”) Firm Transportation service for Calpine Energy Services LP (CES), which has executed a binding precedent agreement with Eastern Shore for such service. CES will use the incremental capacity to deliver natural gas fuel to the Garrison Energy Center, a 309-MW combined cycle power plant being developed by Garrison Energy Center LLC (GEC). CES and GEC are subsidiaries of Calpine Corp.

Eastern Shore asked the commission to approve the certificate of public convenience and necessity by May 1, 2015. An order by this date will allow construction of the White Oak Mainline Expansion Project to be completed and placed into service during the fourth quarter of 2015, targeting Oct. 1, 2015, which is consistent with CES’s service request.

In 2011, GEC and Eastern Shore began discussions regarding GEC’s proposal to develop the Garrison Energy Center and its need to secure natural gas transportation services. Those discussions yielded a precedent agreement whereby Eastern Shore agreed to construct the White Oak Lateral, a 5.5-mile 16-inch pipeline connecting the Garrison Energy Center to Eastern Shore’s pipeline system, and CES agreed to enter into a long-term service agreement for Delivery Lateral Firm Transportation (DLFT) service to be provided via the lateral.

In June 2013, Eastern Shore filed an application with the commission seeking authorization to construct, own, operate and maintain the White Oak Lateral. The commission issued the requested certificate by order dated Nov. 27, 2013. Eastern Shore commenced construction of the White Oak Lateral in early 2014 and received commission authorization to place the lateral into service on Oct. 1, 2014. The White Oak Lateral precedent agreement between Eastern Shore and CES only addresses firm transportation service on the White Oak Lateral. It does not provide for any firm transportation service on Eastern Shore’s mainline system.

After executing the White Oak Lateral precedent agreement, CES and Eastern Shore shifted the focus of their discussions to securing firm transportation service on Eastern Shore’s mainline system to the White Oak Lateral. These discussions led CES and Eastern Shore to enter into a precedent agreement in August 2014 whereby Eastern Shore agreed to construct the facilities necessary to provide 45,000 dt/d of OPT≤90 firm transportation service and CES agreed to execute a long-term service agreement for the same. Eastern Shore now seeks authorization to construct the expansion facilities required to provide the level of OPT≤90 service specified in the CES precedent agreement. The construction of the White Oak Mainline Expansion Project will allow Eastern Shore to furnish 45,000 dt/day of incremental firm transportation service under Rate Schedule OPT≤90 to the White Oak Lateral interconnection with Eastern Shore’s mainline system. Gas delivered to this point will be transported on the White Oak Lateral to the Garrison Energy Center. 

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.