Tennessee Gas kicks off open season for new gas supplies into northeast U.S.

Tennessee Gas Pipeline Co. LLC (TGP), a Kinder Morgan company, on Sept. 9 announced the start of its non-binding PowerServe open season, which is a new, customized, flexible firm service designed to meet the unique needs of gas-fired generators specifically in the Northeast and New England.

PowerServe firm service will utilize assets of TGP’s proposed Northeast Energy Direct Project (NED), including regional storage, line pack and legacy TGP facilities across its existing broad Northeast market footprint. The company said it will leverage its uniquely valuable connectivity to low-cost gas supply and interconnecting pipelines and proximity of TGP’s system to electric power generation load centers in New England and upstate New York to provide PowerServe service.

TGP is offering up to 740,000 dekatherms per day of natural gas transportation capacity in the open season. The amount of capacity and specific assets required to provide the no-notice and non-ratable hourly service components of the PowerServe service will be determined following the close of the open season based on shipper interest as indicated in submitted service request forms (SRFs).

Among the planned terms and conditions, TGP’s PowerServe will provide enhanced hourly flow rights and no-notice service so gas-fired generators can flow gas without confirmation of upstream supply, the company said. The no-notice component will be available under either a Storage Service option or an Automatic Park and Loan option, both of which will be supported by regional storage and/or line pack. PowerServe is intended to be subscribed by power plant operators or by customers serving power plant operators such as electric distribution companies, natural gas marketers or aggregators.

Power plant operators can contract directly with TGP or can obtain temporary capacity from an electric distribution company or other suppliers contracting for PowerServe. Capacity release options will be available to facilitate transfer of PowerServe service to power plant operators, or firm transportation service to other shippers on TGP. Understanding the requirements of generators and those who supply them, TGP will entertain varying term lengths with corresponding rates.

During this open season, potential shippers will be able to select, subject to agreement by TGP, a combination of primary receipt points along the NED Supply Path and Market Path components, including pipeline interconnections at Wright, New York, and at locations connecting storage assets to the Supply Path and/or Market Path. Delivery points will be available on the NED facilities, as well as on TGP’s existing facilities throughout the Northeast.

TGP’s NED project is designed to address the critical need for additional pipeline infrastructure and firm transportation service in the Northeast and New England. The project includes upgrades to TGP’s existing system and construction of new infrastructure in Pennsylvania, New York, Massachusetts, New Hampshire and Connecticut. TGP’s NED project has a planned in-service date as early as November 2018.

  • The Supply Path of the project originates in the dry gas heart of the Marcellus Shale along TGP’s existing 300 Line in northeast Pennsylvania and extends to Wright, New York, and is scalable up to 1.2 billion cubic feet per day (Bcf/d).
  • The Market Path of the project originates at Wright, New York, and extends to Dracut, Massachusetts, and points beyond Dracut, utilizing the unique market reach of TGP’s legacy system and is scalable up to 1.3 Bcf/d.

TGP’s NED project is designed to maximize the use of existing energy corridors in order to minimize impacts to the environment and landowners. The Market Path of the NED project in Massachusetts and New Hampshire is 91% co-located with existing energy corridors.

As currently configured, NED project facilities are composed of the following:

NED Supply

  • 41 miles of 36-inch pipeline looping along TGP’s existing 300 Line in northeast Pennsylvania;
  • 132 miles of 30-inch pipeline from TGP’s existing 300 Line around Troy, Pennsylvania, to Wright, New York; and
  • Compression facilities sufficient to meet the needs of contracted services.

NED Market

  • 188 miles of 30-inch pipeline from Wright, New York to Dracut, Massachusetts;
  • Identified lateral facilities in Massachusetts and Connecticut; and
  • Compression facilities sufficient to meet the needs of contracted services.

TGP said it intends to construct and place into service the facilities that are ultimately required to provide the firm transportation services as contracted. TGP’s NED Market Path is anchored by executed binding precedent agreements totaling over 560,000 dekatherms per day of firm transportation capacity.

Discussions with various potential shippers interested in subscribing for firm capacity on TGP’s NED Market path expansion are ongoing (including for traditional FTA service), and Supply Path binding precedent agreements continue to be executed.

The open season started on Sept. 9 and will close at 4 p.m. central time on Oct. 29.

Kinder Morgan (NYSE: KMI) is the largest energy infrastructure company in North America. It owns an interest in or operates approximately 84,000 miles of pipelines and 165 terminals. The company’s pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals, and handle bulk materials like coal and petroleum coke. Kinder Morgan is the largest midstream and third largest energy company in North America with an enterprise value of approximately $115 billion.

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.