Subject: FW: SOUTHERN NATURAL FILES $245 MILLION PROPOSAL TO BOOST CAPACITY
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Date: Wed, 10 Oct 2001 17:07:22 -0700 (PDT)

fyi...

 -----Original Message-----
From: 	Calcagno, Suzanne  
Sent:	Wednesday, October 10, 2001 4:17 PM
To:	Goodell, Scott; Taylor, Craig; Lamadrid, Victor; Wood, Tracy
Cc:	Superty, Robert
Subject:	SOUTHERN NATURAL FILES $245 MILLION PROPOSAL TO BOOST CAPACITY

From Inside FERC (Oct. 8th)--pls let me know if you want more detail or would like to see the FERC filing.  Will keep you posted as the project progresses through FERC.

Suzanne
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SOUTHERN NATURAL FILES $245 MILLION PROPOSAL TO BOOST CAPACITY
To serve local distributors, industrial users and power generators, Southern Natural Gas Co. filed with FERC last week to build $245 million worth of compression, pipeline looping and other facilities to transport a total of 359,891 Mcf/day. The project would be constructed in two phases.

The expansion would start moving 320,714 Mcf/day by June 1, 2003, said the Oct. 1 application (CP02-1 et. al.). In the project's second phase, Southern Natural would install additional facilities to move 39,177 Mcf/day by May 1, 2004. Phase one includes 114.5 miles of looping in Mississippi, Alabama and Georgia, which would be built in 11 segments that range in length from 3.41 miles to 16.74 miles. Pipe diameters would range from 24 inches to 36 inches. Phase two includes 8.8 miles of 30-inch-diameter looping in Georgia that would be
constructed in two segments of 4.8 miles and 4.0 miles.

Southern Natural proposed installing a total of 76,930 horsepower of compression, of which 11,280 hp would replace existing compression facilities that have deteriorated or otherwise become obsolete. Phase one includes ten compression units ranging in size from 3,550 hp to 15,000 hp. Under phase two, one 4,730 hp unit would be installed. Furthermore, Southern Natural proposed abandoning six compressors that generate a total of 9,930 hp.

All 359,891 Mcf/day of the capacity has been subscribed, the application said. During an open season held between Dec. 15 and Jan. 26, firm service agreements were reached with Southern Co. Services Inc., 97,950 Mcf/day, Calpine Energy Services LP, 95,000 Mcf/day, SCANA Resources Inc., 93,046 Mcf/day, Effingham County Power LLC, 58,766 Mcf/day, the City of Austell, Ga., 6,366 Mcf/day, Morgan Stanley, 5,400 Mcf/day, Proctor & Gamble, 1,763, and Kimberly-Clark, 1,600 Mcf/day.

Southern Natural asked FERC to allow it to roll in the cost of the expansion in its next rate proceeding "based on the considerable benefit to the overall rates of existing customers." Revenues generated from the new contracts are expected to exceed project costs by approximately $154 million, thus the expansion would result in "a significant benefit" to current shippers, Southern Natural said. In addition to the financial benefits, existing shippers will enjoy operational benefits as well, said the pipeline. "The combination of additional compression and new loop pipeline represents a significant enhancement to system reliability for all shippers delivering gas" in Southern Natural's market area, the
application said. Furthermore, Southern Natural promised that service to existing shippers would not be degraded as a result of the project.