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Sabal Trail gas flows stall as utilities move power plants closer to operation

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Sabal Trail gas flows stall as utilities move power plants closer to operation

Natural gas flows on the first stage of the Sabal Trail pipeline fell away to nothing for the second half of November as the new line waits for Florida power plants to come online and as utility customers adjust to the season.

Sabal Trail Transmission LLC and its shippers said the drop in gas flows, after a spike in the early part of the month, had nothing to do with the pipeline and everything to do with shipper needs. Sabal Trail Transmission is a joint venture of Enbridge Inc.'s Spectra Energy Partners LP, NextEra Energy Inc. and Duke Energy Corp.

Sabal Trail spokeswoman Andrea Grover said the pipeline, which runs more than 500 miles from Alabama into central Florida, is "fully available to meet any customer needs," and questions about flows should go to those customers. Duke Energy Florida LLC is one of two foundation shippers on Sabal Trail. It has 300,000 Dth/d of capacity on the line. The other is NextEra's Florida Power & Light Co., with 400,000 Dth/d of capacity.

Heather Danenhower, a spokeswoman for Duke Energy in Florida, pointed out that the 1,640-MW Citrus County combined-cycle power plant on the pipeline system is not yet in service. The plant is about 70% complete. She said the company expects to bring the first 820 MW online in mid-2018 and the second 820 MW by December 2018. The construction of the lateral from Sabal Trail to the plant is complete and ready for service. Duke Energy plans to receive gas in early 2018 to help commission the plant. Duke Energy's agreement with Sabal Trail for the plant is independent of other agreements.

"Our agreement will allow us to access up to 300,000 MMBtu of natural gas a day," Danenhower said in an email. "This amount is needed for the plant at peak operation each day and is equal to about 293 million cubic feet of natural gas."

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Other power plants are rising on the Sabal Trail line. A NextEra subsidiary asked the Federal Energy Regulatory Commission in September to approve a $30.1 million project, the Okeechobee Lateral, that would deliver up to 400,000 Dth/d of gas to a Florida Power & Light power plant, the Okeechobee Clean Energy Center, which is expected to be in service by mid-2019. The Sierra Club has challenged the lateral project.

Florida Power & Light spokesman David McDermitt said the activity on Sabal Trail reflected current operations. "Electricity demand in FPL's service area is somewhat reduced, which is common for this time of year, particularly with the mild weather and cooler temperatures we've experienced in recent weeks," he said in a Dec. 7 email. "We always strive to dispatch our generation fleet as economically as possible, including purchasing and transporting fuels at the lowest point-of-origin cost possible. As prices shift and/or electricity demand increases, FPL expects to resume transporting natural gas through the [Sabal Trail] system."

Duke Energy's Danenhower also pointed to market conditions and operational needs. "We make decisions based on what's best for our customers," she said. "As a regulated utility, we are required to meet our customers' energy needs 24/7 in the most cost-effective manner and with limited environmental impacts."

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Sabal Trail is part of the larger Southeast Market Pipelines project, which was designed to transform the Florida market with access to Marcellus Shale gas from the Northeast. The project provides gas transportation service from Williams' Transcontinental Gas Pipe Line Co. LLC system, which brings gas down from the Marcellus, and takes the gas deep into Florida for power generation and other uses. With second and third stages, it is expected to eventually move up to 1.1 Bcf/d. The project provides a third pipeline into Florida, joining the Florida Gas Transmission Co. LLC and Gulfstream Natural Gas System LLC lines.

FERC approved the first stages of the $3.2 billion Sabal Trail and its sister projects, the $459.8 million Hillabee expansion of Williams Partners LP and the $537.3 million Florida Southeast Connection of NextEra, in February 2016. Sabal Trail went into service in July 2017.

FERC recently issued a draft supplemental environmental review for the Southeast Market Pipelines project that analyzed greenhouse gas emissions from downstream power plants after being ordered to do so by the U.S. Court of Appeals for the District of Columbia Circuit. FERC has asked the court to revisit the order and change the language so that it just asks for the extra environmental review and does not vacate the project approvals. (FERC dockets CP14-554, CP15-16, CP15-17)

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