Texas Gas downsizes Indiana lateral project due to loss of customer

The Federal Energy Regulatory Commission said in an April 1 notice that Texas Gas Transmission LLC is downsizing an Indiana pipeline project because a project customer has dropped out.

On March 30, Texas Gas filed an amendment for the Southern Indiana Market Lateral Project extending from Henderson County, Kentucky, to Mount Vernon, Posey County, Indiana. The application of the Southern Indiana Market Lateral Project was originally filed on Nov. 12, 2014.

Texas Gas states that one of two new proposed industrial customers decided to cancel its participation in the project. To accommodate this change, Texas Gas proposes: to construct and operate an approximately 30.6-mile, 10-inch-diameter pipeline lateral with a capacity of 53.5 MMcf/day, instead of the originally proposed approximately 29.9 miles, 20-inch-diameter pipeline with a capacity of 166 MMcf/day; and to remove the proposed construction of the metering facilities designed to serve the departing prospective customer.

No new landowners are affected by the amended project. The cost of the amended project is approximately $63 million instead of $79.7 million as originally proposed.

Midwest Fertilizer Co. LLC and SABIC Innovative Plastics Mt. Vernon LLC were the original customers. Said the March 30 amendment request: “Texas Gas has learned that Midwest Fertilizer Company, LLC did not receive approval from its Board of Directors to commit to the 110,000 MMBtu/d of firm transportation service that it had originally contracted for in the precedent agreement.”

In that March 30 amendment, Texas Gas asked for issuance of an order granting a certificate for the project by July 16, 2015, to allow Texas Gas to begin full construction by Sept. 1, 2015, and place the project facilities in service by July 1, 2016.

Texas Gas had executed a precedent agreement with SABIC that provides for 56,000 MMBtu/d of firm transportation service on the proposed 20-inch pipeline lateral (and for a SABIC only project, 53,500 MMBtu/d of firm transportation service on a proposed 10-inch pipeline lateral) at negotiated rates for delivery to SABIC’s existing facility and its proposed cogeneration plant under development in Posey County, Indiana, for a primary term of 20 years.

The new pipeline will begin at an interconnection with Texas Gas’ existing Robards Junction facilities in Henderson County, Kentucky, extending approximately 30.6 miles westward and including a crossing of the Ohio River to a proposed interconnection with SABIC’s existing plant and proposed cogen facility located near Mount Vernon in Posey County, Indiana.

The amendment noted: “SABIC has executed a Precedent Agreement for 53,500 MMBtu/d of firm transportation service to be delivered to its existing plant and the new CoGen facility being constructed that will use natural gas instead of coal to create steam and power for the SABIC thermoplastics facility.”

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.