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Spire STL pipeline would provide Laclede with more contract flexibility

If approved, Spire Inc.'s proposed 400,000-Dth/d Spire STL pipeline would start providing supplies to affiliate Laclede Gas Co. just as the utility's long-term contracts with other regional pipelines wind down.

The project, which would off-load Appalachian shale supplies from the Rockies Express Pipeline LLC system and carry them to the St. Louis area, is targeting an in-service date in November 2018. Laclede Gas has almost 2 MMDth/d of contracted capacity with three other regional pipelines due to expire by the end of 2018, according to SNL Energy's Index of Customers data.

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In proposing the project, Spire cited competitively priced gas in Appalachia and additional supply diversity as motivation for development. If the pipeline is built, the St. Louis area will be able to get gas from the Gulf, the Rockies, and the booming Marcellus and Utica shales. Laclede Gas has signed on as the foundational shipper, booking 350,000 Dth/d of capacity.

The proposal worried one of Laclede Gas' key suppliers, Enable Mississippi River Transmission, LLC, which told FERC that plenty of capacity is available in the region and the Spire STL line is not needed. The Enable Midstream Partners unit feared that Laclede Gas could drop contracts with Mississippi River Transmission for the total capacity of 350,000 Dth/d it has committed to Spire STL, according to a protest filed with FERC. Ameren Services Co. and the Missouri Public Service Commission filed similar protests with the commission.

According to SNL Energy pipeline flow data, Enable Mississippi River Transmission and Southern Star Central Gas Pipeline Inc. used only about 1.7 MMDth/d of their combined 4.5-MMDth/d capacity during March, following a similar trend of underutilization over the past two years. Tallgrass Interstate Gas Transmission LLC, meanwhile, used just over 360,000 Dth/d of its capacity in March 2017.

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In mid-March, Spire STL told FERC that the concerns of Enable and others miss the mark. "The arguments of the protesters can only be interpreted as seeking a commission determination that, for the sake of other pipelines and other shippers ... Laclede should be held hostage to its incumbent pipelines," the developer said.

Spire STL said a de-contract situation "is not only pure speculation, but also highly unlikely." Such a move, Spire STL said, would not work with Laclede's goal of diversifying its operations.

Spire declined to comment any further, as did Enable. The pipeline is estimated to cost $220.3 million. (FERC docket CP17-40)

SNL Energy is an offering of S&P Global Market Intelligence.

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