Florida Gas Transmission Plans $2.5 Billion Phase VIII System Expansion

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Researched by Industrial Info Resources (Sugar Land, Texas)--Florida Gas Transmission Company (Houston, Texas) (FGT), a pipeline system owned jointly by El Paso Corporation (NYSE: EP) (Houston) and Panhandle Energy (Houston), a subsidiary of Southern Union Company (NYSE: SUG) (Houston), is planning to expand its 2.3 billion-cubic-foot-per-day (Bcf/d) natural gas pipeline system by an additional 800 million cubic feet per day (mmcfd). Approximately 85% of the natural gas consumed in Florida is utilized for electrical generation needs. FGT's Phase VIII System Expansion is intended to help Florida's utilities meet the state's projected 1 Bcf/d increase in demand for natural gas by 2015.

The proposed Phase VIII System Expansion will build upon FGT's existing 5,000-mile pipeline system. The proposal will add approximately 400 miles of 36" and 30" diameter pipeline looping along existing right-of-ways and 100 miles of new 36" diameter pipeline called the "West Leg" to connect into the Fort Meyers, Florida, area. More than 75% of the new pipeline will be constructed in Florida. The remaining mileage will be constructed in Mississippi and Alabama.

In support of the expansion, FGT plans to install approximately 170,000 horsepower of new compression. The new units will be a mix of electric and turbine driven compressor packages. FGT presently intends to add compression at nine existing compressor stations and construct one new compressor station #29 just north of Lake Okeechobee, Florida. The existing stations to be expanded under the currently unfilled plan are the compressor stations #10, 11, 12, 13, 14, 15, 24, 26 and 27.

FGT plans to initiate the Federal Energy Regulatory Commission filing process in late 2008. All issues going as planned, FGT expects to begin construction on the Phase VIII System Expansion in the second quarter of 2010 and have the entire project in service by April 2011 just before the summer cooling season begins.

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