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Notice of Open Season 154
REVISED OS154 - Firm Long Term Transportation Capacity to LEIDY From New & Existing Appalachian Producing Areas
Phase I and II of West-to-East Expansion


POSTED: 8/26/2009
- 10/8/2009
2/4/11 - National Fuel Gas Supply Corporation ("National") is negotiating post-Open Season capacity requests and entertaining additional delivery point options is conjunction with our Available Capacity posting.

1/15/10 - National Fuel Gas Supply Corporation ("National") is extending the period of time within which tendered Precedent Agreements related to Open Season 154 must be returned. With this posting, National is extending the deadline for signed Precedent Agreements until further notice.

11/20/09 - Draft OS 154 Credit Agreement and PA Extension Language
National Fuel Gas Supply Corporation ("National") is extending the period of time within which National and Shipper shall have to reconcile any provided credit language edits. With this posting, National is requiring that an agreement on credit language be completed by January 15, 2010.
In addition, National is extending the period of time within which Precedent Agreements must be signed. With this posting, National is requiring that Precedent Agreements must be executed by January 31, 2010.

10/9/09 - Open Season 154 concluded on October 8, 2009. National received binding requests for 175,000 dth/day of firm transportation capacity from area Marcellus producers. National expects to execute the signed precedent agreements submitted by OS154 bidders while pursuing post-Open Season capacity requests for remaining Phase I and Phase II capacity.

National Fuel Gas Supply Corporation   



Firm Long Term Transportation Capacity to LEIDY

From New & Existing Appalachian Producing Areas

Phase I and II of West-to-East Expansion

National Fuel Gas Supply Corporation (“National”) is pleased to announce the commencement of a binding Open Season for new transportation capacity from new and existing interconnects in Appalachia and the Marcellus fairway in central Pennsylvania counties to key northeast market interconnects at Leidy.

The incremental transportation capacity will be provided by new pipeline and compression routed along National’s existing FM100 corridor.  The expansion facilities may be constructed in two phases, depending on shipper requests:  Phase I will be capable of transporting approximately 200,000 dth/d from the producing area, and it includes approximately 32 miles of pipe from National’s Line FM120 area to Leidy and one compressor station.  Phase II can provide approximately 300,000 dth/day of additional transportation capacity, and it consists of 50 miles of additional pipe and compression reaching back to National’s Line K corridor. Refer to the “Project Facilities” section below and the OS 154 Project Map for specifics.

This expansion is offered as a stand-alone project, although National expects that the facilities may become a part of (or initial phases of) Zone 2 of its previously announced West-to-East/Appalachian Lateral project, as described in Open Season 143.

Participation in this Open Season is binding.  A signed Precedent Agreement in the form attached must be part of shippers’ bid submission, along with a completed Service Request Form.  Refer to the “Open Season Bid Documents” section below for details.


In Phase I, National proposes to construct pipeline and compression facilities from the area near the intersection of National Lines FM100 and FM120 to Leidy.  The facilities may include approximately 32 miles of 30-inch pipe and a 7100 hp compressor station designed to receive gas directly and/or pump gas from existing lower pressure pipeline systems into the new high-pressure pipeline.  The Phase I transportation capacity is expected to be approximately 200,000 dth/day, subject to final design based on specific requests.  National anticipates an in-service date for these facilities as early as November 1, 2011.

National anticipates providing additional transportation service as early as November 1, 2012 with the construction of Phase II facilities.  An additional 50 miles of 30-inch pipe is proposed along the existing FM100 corridor back to National’s Line K area, along with a second compressor station with up to 9000 hp.

National reserves the right to tailor the facilities expansion design in response to the specific requests submitted.


The initial incremental cost-of-service project unit rates (at 100% load factor, excluding surcharges) are expected to be between $.27 and $.33.  National also anticipates the project(s) fuel rate will be our existing system fuel rate of 1.15%.  National reserves the right to modify the project rates to reflect revisions to cost estimates or actual facilities costs.

National expects that shipper monetary and fuel rates will be within the above range for Phase I, as well as for the full 82-mile expansion that encompasses both the Phase I and Phase II facilities.

National reserves the right to propose that, as of the in-service date of the Phase II facilities, Phase I and Phase II shippers would pay equal monetary and fuel rates based on the combined costs and fuel usage of the two phases.

National Fuel reserves the right to propose incremental fuel rates in its FERC filing(s), depending on final design.


Project firm receipt points include: Existing and proposed interconnects along the pipeline route paralleling National Fuel’s Line FM100, along National’s Line FM120, Line K, Line YM 52, Line GM97, Line AM60, and Line M systems.

If bidder’s Open Season 154 capacity request exceeds 50,000 dth/day for the required contract term, and one or more new interconnect points along National’s existing pipeline system or on the proposed Phase I/II high-pressure pipeline is required for receipt of shipper’s gas by National, National will waive the interconnect cost for one such new interconnect point.


Bidders are encouraged to refer to the OS 154 Project Map, or contact their Marketing representative, to identify the geographical areas and pipeline systems from which the project facilities can receive gas and deliver it to Leidy interconnects.


Project firm delivery points include: Transco at Leidy, Texas Eastern at Leidy, and Dominion at Leidy.

Shippers will have access to all National Fuel points on a secondary basis.


This Open Season commences on Wednesday August 26, 2009 and will close at 11:00 a.m. (ET) on Thursday, October 8, 2009.


National Fuel will require a minimum fifteen (15) year term to support the project facilities.


Participation in this Open Season is binding.  A Precedent Agreement in the form attached to this Open Season must be executed by an officer of bidders’ entity and be submitted as part of the bid, along with a completed Service Request Form.  The Precedent Agreement includes the following Exhibits:  Exhibit A - Service Agreement, Exhibit B – Credit Annex.

The necessary documents associated with this binding Open Season 154 can be obtained by clicking on the links below:

Precedent Agreement including Exhibits (PDF format)

Precedent Agreement Credit Exhibit B (MS Word format)

Downloadable Service Request Form (PDF version)


Completed bid documents can be returned by mail, fax, or email to:

National Fuel Gas Supply Corporation
6363 Main Street
Williamsville, NY 14203
Fax – (716) 857-7310



The terms of this Open Season require that Shipper and National agree to Credit language contained in Precedent Agreement Exhibit B.  Shippers must submit either an executed credit exhibit in the form provided, or submit “red line” edits with their Open Season bid, in electronic format.  Shipper and National shall have 45 days, beginning with the end date of this Open Season, to reconcile any provided credit language edits, or bid will be removed from consideration and capacity will be re-allocated using the methodology outlined in the “Bid Award Process” section below.


During the binding Open Season period, National Fuel will accept requests with a proposed start date of either November 1, 2011 (Phase I facilities), or November 1, 2012 (Phase I and II facilities). 

Shippers may request all or part of the advertised project capacity. Requests for rate and/or fuel discounts will not be considered. 

All acceptable requests will first be categorized as Phase I (2011) or Phase I/II (2012), based on requested receipt point and shippers’ requested in-service date.  National will then determine the specific amount of capacity to be awarded, taking into account the pipeline system hydraulics associated with specific receipt point requests, and derive estimated rates (expected to be within the range described in the “Rates” section above) for each bid category based on a review of the Open Season requests.  Bids will subsequently be ranked and capacity awarded in each category based on the highest net present value (NPV) of the reservation charge revenues, per unit of capacity (Dth/day) requested.  The NPV calculation will incorporate length of contract term and will utilize a monthly rate of 0.8% (9.6% annually) for discounting purposes.  Interconnect costs, or the waiving of such costs by National, shall not be factored into the NPV calculation.

If requests exceed the project capacity, shippers will be prorated based on NPV ranking.  Bidders requesting Phase I (2011) service who are awarded prorated capacity for 2011 service will be awarded the remaining amount for Phase I/II (2012) service, assuming the facility design can accommodate the request.


 National intends to counter-sign and execute agreements submitted with bids in this Open Season if in National’s sole discretion market interest is sufficient to support the project economics and National deems the project viable.  If National has not executed shippers’ signed Precedent Agreement within 60 days of the Open Season closing date, then it shall surrender the right to do so.

If all capacity created by the proposed expansion is not initially subscribed to Open Season bidders, National Fuel reserves the right to market this capacity post-Open Season without holding an additional Open Season.


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

Joe Kolis                      (716) 857-7520          kolisj@natfuel.com
Terry Falsone               (716) 857-7602          falsonet@natfuel.com
George Linder               (716) 857-7105          linderg@natfuel.com

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



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