Tennessee Gas Pipeline Co. LLC applied Oct. 9 to the Federal Energy Regulatory Commission for a certificate of public convenience and necessity covering certain pipeline facilities located in Pennsylvania that will increase natural gas capacity on its pipeline system by approximately 135,000 dekatherms (Dth) per day.
This is called the Orion Project. It is comprised of three primary components:
- construction of a 36-inch outside diameter (OD) pipeline loop, approximately 8.23 miles in length, along Tennessee’s existing 300 Line right-of-way (ROW) in Wayne and Pike counties, Pennsylvania, ending at existing Compressor Station (CS 323) (Loop 322);
- construction of a 36-inch OD pipeline loop, approximately 4.68 miles in length, along Tennessee’s existing 300 Line ROW in Pike County Pennsylvania, beginning at existing CS 323 (Loop 323); and
- installation of certain appurtenant and auxiliary facilities, including a new pig launcher, crossover and connecting facilities to connect the pipeline loops with Tennessee’s existing 300 Line.
The market need for this project arises from the projected growing demand for energy in the form of cleaner burning natural gas in the Middle Atlantic and New England regions. Tennessee has signed binding precedent agreements with three shippers – South Jersey Resources Group LLC (SJRG), South Jersey Gas Co. (SJGC) and Cabot Oil & Gas Corp. (collectively called the “Project Shippers”) – for the full 135,000 Dth/day of firm incremental capacity that would be created by the project.
Tennessee asked the commission to grant certificate authorization by Nov. 1, 2016, to ensure timely construction of the project. The issuance of the requested authorization by that date will allow Tennessee to complete the acquisition of needed rights-of-way and construction of the project in a time frame compatible with the June 1, 2018, in-service date requested by the Project Shippers.
Tennessee’s existing interstate pipeline system is fully subscribed in the region of Pennsylvania where the project is located. In order to meet the Project Shippers’ demand for transportation service, Tennessee proposes to add approximately 135,000 Dth per day of additional firm west-to-east natural gas transportation capacity on its 300 Line from Tennessee’s existing interconnect with Williams Field Services Co. LLC (Meter #47768, the “Gibson” meter) in Zone 4 in Susquehanna County, Pennsylvania, to Tennessee’s existing interconnect with Columbia Gas Transmission LLC (Meter #420245, the “Milford” meter), in Zone 4 in Pike County, Pennsylvania.
The estimated cost of the project, including contingency, overheads, and Allowance for Funds Used During Construction (AFUDC), is approximately $143 million.
Tennessee held a binding Open Season for the project from Jan. 30, 2015 to Feb. 20, 2015, offering up to 200,000 Dth per day of expansion capacity from Tennessee’s existing interconnect with Williams Field Services to Tennessee’s existing interconnect with Columbia Gas Transmission.
SJGC and SJRG are the Anchor Shippers for the project. An Open Season participant was eligible to qualify as an Anchor Shipper if it committed to the same 15 year minimum term commitment as the Anchor Shippers, committed at least 39,000 Dth per day within the project path, and also elected a negotiated rate option for the project.
Cabot submitted a bid for project capacity in the Open Season, and was awarded 18,000 Dth per day. Because its bid was not at least 39,000 Dth per day, Cabot is not considered an Anchor Shipper, but its commitment as a Project Shipper provides additional market support for the project.
In addition, as part of the binding Open Season, Tennessee solicited offers from its shippers to permanently relinquish capacity that could be used to provide transportation service to the Project Shipper as part of the project and requested that any such offers be submitted by Feb. 13, 2015. No shippers responded to the turnback solicitation.