Millennium Unveils Phased Plan for Pipeline Development
|Tuesday, February 17, 2004
In response to pressing natural gas market demands in the northeastern U.S., the Millennium pipeline project announced a two-phase development plan that involves two of New York's largest energy firms.
Millennium Phase 1 will provide supply access to a number of supply and storage basins, including the Dawn, Ontario, trading hub. In a key new development for the project, Phase 1 will feature National Fuel Gas Company's Empire State Pipeline (Empire) as an upstream supply link for the pipeline and KeySpan as a significant new anchor shipper, allowing for increased deliveries to KeySpan's customers.
Expected to be in service by November 2006, Phase 1 will include the 186-mile section of Millennium from Corning, N.Y., to Ramapo, N.Y. This section replaces and upgrades an existing Columbia Gas Transmission natural gas pipeline. Phase 1 will transport 500,000 dekatherms of natural gas per day. Upstream supply for the pipeline will be provided via a 250,000 dekatherm/day expansion of the Empire system that includes an 83 mile extension from near Rochester, N.Y., to Corning, N.Y. The Empire system, through its connection to the TransCanada Pipeline system at Chippawa, provides access to the Dawn hub in southern Ontario.
Millennium Phase 2 will cross the Hudson River, linking to the New York City metropolitan market. In an effort to advance this phase of the project, Millennium has filed an appeal in U.S. Federal District Court of a U.S. Department of Commerce ruling relating to the project's Hudson River crossing plan. Millennium has not yet set an in-service date for Phase 2, but is proceeding with Phase 1 as the appeal moves forward.
"These are important developments in Millennium Pipeline's ability to enhance the energy infrastructure of New York and the Northeast," Glen L. Kettering, president of Columbia Gas Transmission Corp, said. "Millennium Phase 1 will allow us to begin delivering much-needed new energy supplies to the region, even as we continue working to complete Millennium's link to energy consumers in the New York City metropolitan market."
Kettering noted that the phased approach also provides timely access to a variety of upstream natural gas supply and storage options for KeySpan and other shippers on Empire and Millennium. Columbia Gas Transmission, a unit of NiSource Inc. (NYSE: NI), is Millennium's developer and largest interest holder.
National Fuel Gas Company owns and operates Empire State Pipeline, an existing 24-inch diameter natural gas transmission pipeline that originates at the United States/Canada border at the Chippawa Channel of the Niagara River and extends easterly 157 miles from Buffalo, N.Y., to near Syracuse, N.Y. National Fuel is pursuing a 250,000 dekatherm/day expansion of this system by constructing a lateral pipeline southward to connect with Millennium near Corning, N.Y. Customers will have access to abundant and diverse gas supplies at the Dawn hub through Empire's connection with the TransCanada PipeLine system at Chippawa.
"We believed that the acquisition of the Empire State Pipeline would provide us with strategic growth opportunities, and today's announcement supports that," said Philip C. Ackerman, Chairman, President and CEO of National Fuel. "KeySpan's market support for this project is an important step for developing this additional upstream link to the Millennium system and to create opportunities for new and existing customers. We are now poised to expand the Empire system to create a much-needed supply path for natural gas to reach customers in New York State and the Northeast."
Millennium also announced that KeySpan, the largest distributor of natural gas in the Northeast, plans to subscribe for as much as 150,000 dekatherms of natural gas transportation service per day on the Millennium Pipeline system. KeySpan also plans to utilize the TransCanada Pipelines and Empire as the upstream route to Millennium. KeySpan, which serves more than 2.5 million gas customers in the Northeast, is New York's largest investor-owned electric generator and operates the Long Island Power Authority electric system serving 1.1 million customers.
"Millennium, Empire and the TransCanada infrastructure can provide KeySpan with access to new, economically priced sources of natural gas supply, enhanced storage options and added delivery capacity to meet the needs of our customers," said Robert B. Catell, Chairman and CEO of KeySpan. "On behalf of our nearly three million gas customers, supply reliability and price stability are our top priorities. These pipelines will be critical to the clean energy future of the Northeast region."