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Notice of Open Season 142
OS142 - LONG TERM FIRM STORAGE CAPACITY

STATUS IS:
CLOSED

POSTED: 9/5/2008
TERM:9/5/2008
- 10/3/2008
Update on results of Open Season #142 and #143

Posted 7/31/09
National Fuel Gas Supply Corporation ("National") is extending the period of time within which tendered Precedent Agreements related to Open Seasons 129, 142 and 143 must be returned. With this posting, National is requiring that signed Precedent Agreements be returned not later than January 15, 2010.

This extension will provide shippers with sufficient time to review the agreement language. It will also afford them the opportunity to participate in National's planned binding open season for transportation capacity from its FM100/FM120/Line K systems to Leidy, PA.

Posted 10/27/08
Open Season #142 providing up to 8.5 Bcf of storage service, and Open Season #143 providing capacity on the newly developed Appalachian Lateral and the previously announced West-to-East Project, closed on 10/3/08. Results for both open seasons were strong with more than 1 Bcf of transportation requests timely received. Requests focused on moving Appalachian sourced gas (Marcellus and other) and storage transportation. In addition, very substantial interest remains from the original West-to-East open season #129, focused principally on Rockies Express gas at Clarington, Ohio, which closed in mid-2007. We are currently confirming the details of the requested capacity, particularly the location, pressure, and gas quality of future Appalachian production volumes. This information is populating a hydraulic model that will be used to optimize the transmission facility design. A construction cost estimate and rates will be developed from this. We currently anticipate providing shippers who have participated in any of the related open seasons with binding precedent agreements by early December 2008. Longer term, assuming adequate binding support for the project, this will be followed with FERC NEPA Pre-filing community outreach this winter, and development of the FERC application during 2009.

National Fuel Gas Supply Corporation

OS142 – LONG TERM FIRM STORAGE CAPACITY

             

National Fuel Gas Supply Corporation (“National Fuel”) is pleased to announce the availability of up to 8,500,000 Dth of long-term firm storage capacity, with service to commence upon completion of the required facilities.  This expansion storage capacity, which is being developed in conjunction with National Fuel’s West to East and Appalachian Lateral transportation projects, involves the expansion of several existing National Fuel storage reservoirs:  East Branch, Galbraith, and Tuscarora.  Figure 1 on this page is an approximate representation of these storage facilities relative to National Fuel’s Appalachian Lateral and West to East (“W2E”) pipeline projects (Open Season 143).

Transportation service for injections and withdrawals to/from National Fuel storage is required – please refer to the “Required Storage Transportation” section below.

OPEN SEASON TIME FRAME:

Commences September 5, 2008 and extends until 11:00 a.m. (ET) on October 3, 2008.

Please click here for Figure 1 (project map).

 

COMMENCEMENT OF SERVICE: 

In this Open Season, National Fuel will afford shippers the opportunity to request capacity and an associated desired character of service.  That is, National Fuel plans to develop this project as either a 70-day or 90-day storage service, depending on the aggregate level of market interest.  The total amount of storage capacity and the associated character of service to be awarded and subsequently developed as part of this expansion is expected to be phased as shown below (subject to receiving a sufficient level of commitments, and following the receipt of required authorizations andthe construction of facilities):

For 70-day service:

Phase I      -  April 1, 2011  -  up to 5,000,000 Dth of storage capacity

Phase II     -  April 1, 2012  -   up to 3,500,000 Dth of storage capacity, for a

Total of 8,500,000 Dth

For 90-day service:

Phase I       -  April 1, 2011  -  up to 4,400,000 Dth of storage capacity

Phase II      -  April 1, 2012  -  up to 3,500,000 Dth of storage capacity, for a

Total of 7,900,000 Dth

INJECTION AND WITHDRAWAL RIGHTS:

70-day Service

Phase I

Phase II

Total

Maximum Storage Quantity (“MSQ”)

5,000,000 Dth

3,500,000 Dth

8,500,000 Dth

Maximum Daily Injection Quantity (“MDIQ”)

34,000 Dth/d

26,000 Dth/d

60,000 Dth/d

Maximum Daily Withdrawal Quantity (“MDWQ”)

68,500 dth/d

52,500 Dth/d

121,000 Dth/d

  

Inventory Level

Ratchet

Injection Ratchets (Apr 1 – Oct 31)

0% -   70%

  100% of MDIQ

71% - 100%

    70% of MDIQ

Withdrawal Ratchets (Nov 1 – Mar 31)

100% - 20%

  100% of MDWQ

20% - 10%

    70% of MDWQ

10% -   0%

    40% of MDWQ

    

90-day Service

Phase I

Phase II

Total

Maximum Storage Quantity (“MSQ”)

4,400,000 Dth

3,500,000 Dth

7,900,000 Dth

Maximum Daily Injection Quantity (“MDIQ”)

31,400 Dth/d

25,000 Dth/d

56,400 Dth/d

Maximum Daily Withdrawal Quantity (“MDWQ”)

49,000 dth/d

39,000 Dth/d

88,000 Dth/d

             

Inventory Level

Ratchet

Injection Ratchets (Apr 1 – Oct 31)

0% -   70%

  100% of MDIQ

71% - 100%

    70% of MDIQ

Withdrawal Ratchets (Nov 1 – Mar 31)

100% - 30%

  100% of MDWQ

30% - 15%

    70% of MDWQ

15% -   0%

     40% of MDWQ

STORAGE RATES AND FUEL:

National Fuel expects to file with FERC for an incremental Firm Storage Service (“FSS”) recourse rate for the expansion storage capacity.  Based on initial Engineering estimates, and subject to authorizations and actual construction costs, the indicative incremental storage unit rate(s) are:

  • $2.28 per Dth for 70-day service    (8,500,000 Dth total)
  • $2.05 per Dth for 90-day service    (7,900,000 Dth total)

Fuel:  National Fuel expects the Surface Operating Allowance (“SOA”) associated with either incremental storage service to be consistent with its current tariff SOA rates for FSS service – 1.4% on injections, and 1.4% on withdrawals.  Shippers should refer to Open Season 143 for information regarding the fuel/LAUF associated with the required transportation service.

REQUIRED STORAGE TRANSPORTATION:

Due to certain limitations within National Fuel’s pipeline system, the incremental (storage) transportation capacity offered in National Fuel Open Season 143 is required in conjunction with this storage expansion offering. Consequently, in order to be awarded storage capacity in this Open Season, bidder must also obtain complementary transportation service via National Fuel Open Season 143.

The receipt and delivery points that may be made available by combining the transportation capacity expansion outlined in Open Season 143 with this storage offering are listed below:

Receipts for Injection*

Deliveries on Withdrawal*

Millennium – Corning

Empire - Corning

TGP – Roselake

DTI – Ellisburg

TETCO – Leidy

TETCO – Bristoria

Transco – Leidy

Transco - Wharton

Waynesburg

Clarington

Millennium – Corning

Empire - Corning

TGP – Roselake

DTI – Ellisburg

TETCO – Leidy

TETCO – Bristoria

Transco - Leidy

Transco - Wharton

TCPL – Niagara

Waynesburg

Clarington

NFGDC – NY

NFGDC – PA

* Shippers interested in other points (including new or existing production

meters associated with OS143) should contact their marketing representative.

The availability of all points is subject to final design of Appalachian Lateral / West to East pipeline project.  In the event that the necessary incremental storage transportation capacity is not yet in service for storage injections beginning April 1, 2011, storage customers may be afforded the opportunity to inject via existing National Fuel interconnections on an interim basis.

TERM:

National Fuel reserves the right to reject bids with a primary term of less than fifteen (15) years.

BID FORMAT AND AWARD PROCESS:

Bids should be submitted by completing the Open Season #142 Bid Sheet along with a Service Request Form (“SRF”).    Interested parties may bid on both Phase I and/or Phase II capacity, and must select the desired character of service (i.e., 70-day or 90-day storage service).  Shippers may submit multiple bids.

Bids are to be submitted as a rate per unit of incremental FSS storage capacity only.  No discounts of the indicative incremental FSS rate(s) or SOA will be considered.  Shippers will pay the applicable demand and commodity rates, surcharges, and Surface Operating Allowance under National Fuel’s FSS rate schedule, as approved by FERC for service on the incremental facilities.

In the first step of the award process National Fuel will establish, based on the aggregate level of interest, the market’s preference for either 70-day or 90-day service.  Bids requesting capacity for the established character of service will then be ranked and capacity awarded according to the net present value (NPV) of the storage Unit Rate bid, per unit of storage capacity. The NPV calculation will incorporate bidders’ proposed contract term and will utilize an annual rate of 9.6% for discounting. Bids for Phase I capacity will be evaluated and awarded separately from Phase II capacity, within the established character of service. Subject to other conditions in this posting, a ratable allocation, based on quantities requested, shall be made among shippers that submit bids that are equal with respect to NPV (term).

Once capacity for the established character of service has been awarded, any remaining Phase I or Phase II capacity shall be offered post-Open Season first to bidders shut out or prorated in the award process.

Although this is a non-binding Open Season, National Fuel intends to negotiate Precedent Agreements with winning bidders that will obligate National Fuel and the bidder to execute a service agreement upon satisfaction of certain conditions.

National Fuel reserves the right to determine the project’s economic viability based on the level of interest.

CREDIT REQUIREMENTS:

Shippers will be required to demonstrate creditworthiness or provide a credit alternative acceptable to National Fuel.

EXECUTION OF AGREEMENTS:

Successful bidders will be required to execute and return a Precedent Agreement within 30 days of receipt. 

OPEN SEASON BID PROCESS:

As outlined above, all Open Season requests must be submitted using the Open Season 142 Bid Sheet and a Service Request Form - both downloadable in PDF format from our website.  Service Request Forms can be also be completed on line.

Shippers submitting more than one bid are asked to provide one Service Request Form and multiple Bid Sheets.

Bids can be forwarded by mail or fax to:

National Fuel Gas Supply Corporation
6363 Main Street
Williamsville, NY 14221
Fax – (716) 857-7310

Questions can be directed to any one of the following Marketing Representatives:

Joe Kolis          – (716) 857-7520
Terry Falsone – (716) 857-7602
George Linder  – (716) 857-7105

The results of this Open Season will be posted on National Fuel's web site, http://www.nationalfuelgas.com.

 

 

Contact Our Marketing Department

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