FERC last week granted approval for a pair of natural gas pipeline projects, including Enbridge Inc.'s East Tennessee Natural Gas LLC (ETNG) and Williams’ Transcontinental Gas Pipe Line Company Co. LLC, aka Transco.
ETNG’s System Alignment (SA) Program is designed to improve reliability in response to shifts in customer demand that have created imbalances on the system. ETNG plans to add two electric compressor stations and pipeline capacity in North Carolina, Tennessee and Virginia.
The SA program, announced in 2022, is expected to begin construction in 2025 and ramp up between mid 2026 and late 2027, according to an ETNG timeline. ETNG plans to add a 24-inch diameter pipe next to an existing 16-inch diameter pipe in Tennessee and replace an eight-inch pipe with a 24-inch pipe in Virginia.
Meanwhile, Transco’s Alabama Georgia Connector Project got approval from the Federal Energy Regulatory Commission to expand capacity on the mainline system by 63,800 Dth/d in the two states to meet growing demand fin Georgia. Transco is targeting a fall start to construction and an in-service date by the end of 2025.
Legacy Users Object
ETNG received pushback from some customers about plans to recoup costs for the SA program evenly among shippers. ETNG estimated the project would cost $390 million and said those costs could be rolled into a future rate case.
Among companies objecting were Dallas-based Atmos Energy Corp., Duke Energy subsidiary Piedmont Natural Gas Co. Inc. and the East Tennessee Group that represents municipal distribution customers.
The shippers had concerns about ETNG’s contracting practices for increasing demand from new customers “exponentially” over the last several years, according to FERC. ETG said the project would benefit newer “displacement” shippers that primarily flow gas from east to west, subsidized by “legacy” shippers that have steadily received gas since the 1950s primarily flowing west to east.
Those west-to-east customers “will shoulder a larger burden of the project’s cost while the benefits will go mostly to east-to-west shippers,” protest filings stated, according to FERC’s summary.
Shales Shift Flows
FERC rejected shipper objections, as the project is designed to improve reliability and flexibility for all existing customers. “Here, ETG’s ‘legacy shippers’ and ‘displacement shippers’ are both ‘existing customers’ for purposes of the certificate policy statement,” FERC stated.
Since 2000, utilization of ETNG’s system has changed “as more gas was sourced from the Marcellus and Utica Shales to take advantage of lower gas prices on the west end of East Tennessee’s system,” FERC said. ETNG demonstrated the need to increase the directional capacity of the pipeline as a permanent solution to reduce its reliance on operational measures to balance the system, FERC said.
“The proposed project will increase the reliability on East Tennessee’s system by reducing East Tennessee’s reliance on displacement and other operational measures such as purchasing gas, using line pack, and relying on other interconnected pipelines,” FERC said in its order. “Accordingly, we find that East Tennessee has demonstrated a need for the project.”
Georgia Demand
Transco’s Alabama Georgia Connector is designed to meet fast-growing demand in Georgia, where power demand projections have grown 17 times above previous forecasts.
The project, at an estimated cost of about $71 million, would upgrade equipment at two compressor units at Compressor Station (CS) 90 and increase horsepower of two gas-fired turbines at the CS 110 in Alabama. In Georgia, the project would upgrade CS 115, replace an electric motor-driven compressor at CS 120 and increase the horsepower of an electric compressor unit at CS 125.
Transco’s Alabama Georgia Connector is designed to expand service and costs would be recovered via rates for new service, according to the FERC order. Transco has entered into contracts for all of the project’s capacity with the Municipal Gas Authority of Georgia, Buford City in Georgia and Oglethorpe Power Corp., FERC said.
Transco’s Southeast Supply Enhancement Project would add about 1.6 Bcf/d of capacity for deliveries from Virginia to Georgia. Transco filed with FERC for authorization of the project in February. It has a targeted in-service date of November 2027.
