El Paso to expand pipeline capacity to California, in Northeast


By the OGJ Online Staff

HOUSTON, May 7 -- Federal regulators Monday issued El Paso Natural Gas Co., a unit of El Paso Corp., a certificate to operate a gas pipeline that will provide 230 MMcfd of natural gas capacity to serve California and the southwestern US.

In addition, El Paso unit Tennessee Gas Pipeline Co. said it filed an application with the Federal Energy Regulatory Commission to expand pipeline capacity in New England. Both pipeline projects are intended to serve rising demand, especially for gas-fired power generation.

The two projects are in addition to a Friday proposal by El Paso and Marathon Oil Co. to conduct a feasibility study for a subsea pipeline route to transport natural gas from Nova Scotia to the northeastern US.

The California project involves a $154 million conversion of 785 miles of an existing crude oil transmission pipeline purchased from Plains All American Pipeline LP and All American Pipeline LP to gas. A spokeswoman for the company said the extra pipeline capacity will serve existing customers when other parts of the El Paso system are down for maintenance. The converted pipeline would begin near the California border at Ehrenberg, Ariz., and extend to McCamey, Tex.

"We won't get new customers," she said. "This will keep us from having to reallocate gas." The project is scheduled to be operational in the fall.

The certification of the project was done under FERC's new expedited procedure to boost supplies to the energy-starved West. The line originally was designed to carry crude oil from California's Outer Continental Shelf to refiners in California and Texas. Designed to handle 300,000 b/d of crude, the line operated at much lower throughput rates.

The $35 million Dracut expansion project in the Northeast will replace 12 miles of existing 16-in. natural gas line with a 24-in. line from Dracut to Burlington, Mass., using existing rights-of-way. The project will increase take away capacity from Dracut by an additional 200 MMcfd to over 600 MMcfd.

With 20 new gas-fired power generators at various stages of development in New England, the company said it is responding with phased pipeline expansions. The Dracut expansion is scheduled to be available for service in the fall of 2002.

"By 2005, natural gas is expected to generate 45% of the electrical power in New England, compared with only 16% in 1998," said Stephen Beasley, president of Tennessee Gas Pipeline. He said use of existing right-of-way will allow the company to minimize the environmental impact, while still delivering an economic project.

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