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Notice of Open Season 159
REVISED OS159 - "Northern Access" Expansion Project
Firm Long Term Transportation Capacity for Marcellus Shale Production to Interconnects with TransCanada (Niagara) and Tennessee (Zone 5)


POSTED: 1/12/2010
- 2/17/2010
Results for Open Season 159 were strong with more than 1.6 Bcf of transportation requests received. National Fuel is in the process of determining the specific amount of capacity to be awarded and will then tender agreements to the successful bidders.


National Fuel has extended the deadline for the receipt of Precedent Agreements so that parties may adequately address the latest NSLL cost information.


Update on Bid Award Process, under the terms of this Open Season:  

  • National Fuel has awarded 320,000 dth/day of firm transportation capacity in OS159 and is negotiating agreements with successful bidders.


Clarification on Bid Award Process, under the terms of this Open Season:  

  • Bidders may submit more than one bid.  If a bidder is awarded capacity under more than one request, however, the bidder’s rejection of any awarded capacity will result in the termination of any lower-value capacity award(s).
  • Once capacity has been awarded to a bidder with respect to a particular bid, the bidder must sign a precedent agreement for the awarded capacity within thirty days of receipt or its award will be terminated.  The bidder cannot elect to sign a precedent agreement for a reduced quantity.
  • If it is necessary to prorate capacity among successful bidders, agreements will be sent to each successful bidder reflecting such proration.  The agreements will provide for a range of quantities between the prorated (awarded) quantities and the requested quantities.  The final contract quantity will be within this range and will be determined by the capacity ultimately subscribed by all successful bidders. 

Please Note: The specific amount of awarded capacity may be less than 450,000 dth/d, based on the requested receipt and delivery point combinations and an ongong review of NY market no-notice obligations.

National Fuel Gas Supply Corporation   


Notice of Open Season – REVISED OS159

“Northern Access” Expansion Project

Firm Long Term Transportation Capacity for Marcellus Shale Production  to Interconnects with TransCanada (Niagara) and Tennessee (Zone 5)


National Fuel Gas Supply Corporation (“National Fuel”) is pleased to announce the commencement of an Open Season for firm transportation capacity from existing interconnects at Leidy (Transco, TETCO), Wharton (Transco), Ellisburg (TGP, DTI), and Independence (Millennium) to Niagara (TransCanada, TGP), East Aurora (TGP Zone 5), Marilla (DTI), and Pendleton (Empire).

The Northern Access project will enable Marcellus shale and conventional production gas to flow north to eastern Canada and the liquid markets at Niagara and Dawn.  The Northern Access expansion project could provide up to 450,000 dth/day of incremental firm transportation capacity.


The project facilities include new bi-directional metering at Niagara and East Aurora, incremental compression at East Aurora, Rose Lake, and Pendleton, odorization enhancements, and miscellaneous station piping improvements.  Facilities design and other receipt and delivery point enhancements will be considered based on Open Season requests.














Project primary firm receipt point options include:

  • Leidy (Transco)
  • Leidy (TETCO)
  • Wharton (Transco)
  • Roselake (TGP)
  • Andrews Settlement (TGP)
  • Ellisburg (DTI)
  • Independence (Millennium)

Other receipt points may be available - bidders are encouraged to contact a National Fuel marketing representative regarding availability.

National Fuel will accept bids that propose existing and/or proposed direct interconnect receipt points, provided that the proposed Northern Access expansion project facilities can provide the transportation path requested.

In this Open Season, bidders may also propose receipt points that require the West-to-East Phase I and/or Phase II expansion capacity offered in National Fuel’s Binding Open Season 154.  In order for such bidders to be eligible to bid in this Open Season, they must have signed Precedent Agreements pursuant to Open Season 154, OR prior to the closing date of this Open Season have submitted a Service Request Form for capacity on either West-to-East Phase I or Phase II.


Project primary firm delivery point options include:

  • Niagara (TransCanada)
  • Niagara (TGP)
  • East Aurora (TGP Zone 5)
  • Pendleton (Empire) *
  • Marilla (DTI)
  • National Fuel Gas Distribution (New York only)

*Availability of the Pendleton delivery point is contingent on adequate incremental Firm Storage Transportation (“FST”) market support for the required delivery point facilities.

Other delivery points may be available - bidders are encouraged to contact a National Fuel marketing representative regarding availability.

FT and FST shippers will have access to all National Fuel points on a secondary basis.


Commences January 12, 2010 and concludes on February 17, 2010 at 11:00 am EST.


National Fuel reserves the right to reject bids with a proposed term of less than ten (10) years.


National Fuel expects to provide transportation service under National Fuel’s existing Firm Transportation (“FT’) (or FST in the case of Pendleton deliveries) rate schedule. 

Listed below are the current maximum tariff rates for FT service:

FT Rate Component

Maximum Rate

Reservation Charge

$3.3612 per Dth/day

Commodity Charge

$0.0063 per Dth

FERC ACA Commodity Surcharge

$0.0019 per Dth

Fuel and Company Use/LAUF


100% Load Factor Rate

$0.1168 per Dth

  • Reservation Charge (monthly, applied to contract MDTQ)
  • Commodity Charge (daily, applied to Dth quantity transported)
  • FERC ACA Commodity Surcharge (daily, applied to Dth quantity transported)
  • Fuel Loss and Company Use (Delivered volumes are receipt volumes less 1.4% fuel and company use retention and transportation LAUF retention)
  • 100% Load Factor Rate (excluding ACA surcharges)

National Fuel will reserve the right to propose incremental rates in Precedent Agreements if warranted by the project economics.


Transportation service for the project described in this offer will be available for commencement upon completion of facilities, which could be as soon as late 2011, although the regulatory approval process for the required facilities could dictate a 2012 in-service date.



During the Open Season period, National Fuel will accept requests for service commencing as early as November 1, 2011.  For bids made in conjunction with capacity to be obtained pursuant to Open Season 154 (West-to-East Phases I and II), the applicable start date for bid awarding purposes shall be November 1, 2011 (Phase I shippers) and November 1, 2012 (Phase II shippers).

Requests for rate discounts will not be considered during this Open Season.  The maximum tariff FT rate described above shall be applicable in the evaluation of all bids - except those made in conjunction with Open Season 154 as described above, which shall be evaluated using a estimated monthly reservation rate of $2.4300.  Shippers may request all or part of the advertised project capacity.  All acceptable requests will be ranked and capacity awarded based on the highest 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.  In the event that multiple shippers submit requests that are equivalent in value and term, the available capacity shall be prorated to those shippers based on the quantities requested.


If National Fuel determines that the market interest is sufficient to support the system expansion as described, then National Fuel will proceed to obtain the required customer agreements.  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 precedent.  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.

National Fuel reserves the right to determine the economic viability of any required expansion(s).

An interstate pipeline interested in acquiring Northern Access capacity may propose to negotiate a capacity lease agreement with a lease payment based on the maximum tariff rates shown above.  National Fuel will consider including a provision in a capacity lease making the lease contingent on regulatory approvals required by the requesting pipeline to utilize the leased capacity.



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


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


All Open Season requests must be submitted using a Service Request Form either by completing a Service Request Form online, or by downloading the PDF version from our website and submitting the completed form by mail or fax to:

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


Inquiries 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

Genevieve Dispenza     (716) 857-6945

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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