US interstate natural gas pipelines begin to cope with firm-capacity turnback dilemma

04/03/2000
Even as the number of US interstate natural gas pipeline companies continues to dwindle through mergers and acquisitions, the survivors must grapple with what is arguably the most critical issue they face: capacity turnback.Capacity turnback is the reduction or return of capacity to the pipeline company at the expiration of a firm-transportation contract. Firm contracts-typically carrying tariffs higher than those for interruptible service-ensure the right to transport gas through a pipeline without disruption. Any contracts for unwanted capacity, in turn, must be remarketed to other prospective shippers or risk undermining the pipeline system's profitability.The issue of capacity tur...
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