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Notice of Open Season 179
OS179 - Firm Transportation to Dominion Transmission ("DTI") Line 50 or Line TL-479 at Ardell Station and Tennessee Gas Pipeline ("TGP) at Lamont.


POSTED: 11/16/2011
- 1/19/2012
At interested bidder's request National Fuel Gas Supply Corporation has extended the end date for bids to 11 AM EST on January 19th 2012.

1/19/2012 - Bids are being reviewed and contracts will be tendered to successful bidders of this capacity.

National Fuel Gas Supply Corporation     


Open Season – OS 179 REVISED


West-to-East Expansion  -  Segment 1


Firm Transportation Capacity to Dominion Transmission (“DTI”) Line 50 or Line TL-479 at Ardell Station and Tennessee Gas Pipeline (“TGP”) at Lamont




National Fuel Gas Supply Corporation (“National”) is pleased to announce the commencement of an Open Season for new transportation capacity from prospective and existing interconnects in the central Pennsylvania Marcellus fairway to DTI near Ardell Station and TGP at Lamont, both in Elk County, Pennsylvania.




The transportation capacity available in this Open Season would be provided by constructing the first segment of National’s proposed West-to-East pipeline expansion (“W2E”), following receipt of FERC authorization.  The facilities, herein referred to as Segment 1 of W2E (“Segment 1”), include new pipeline and compression designed to receive gas on or near National’s pipeline system in Cameron, Elk, Clearfield, Jefferson, and/or Potter producing counties of Pennsylvania and deliver it to the DTI system near DTI’s Ardell station.


National expects that it may be able to develop incremental Segment 1 capacity of as much as approximately 150,000 Dth/day, though National reserves the right, in its sole discretion, to award total capacity greater or less than this amount based on project economics.  National expects that as much as approximately 50,000 Dth/day of the total Segment 1 capacity may be awarded from receipt points near National’s Overbeck/Line K area to DTI at Ardell, and 30,000 Dth/day to TGP at Lamont. Other project volumes may be received from areas described in the “Receipt Points” section below.


Please click here for the OS179 Project Schematic



Specifically, the Segment 1 facilities include:


  • A new compressor station located near the intersection of National’s Lines FM100 and FM120 (“Elk Station”). Elk Station will receive gas from National’s pipeline grid and discharge it for delivery to DTI.
  • A new section of 24” pipeline along National’s existing FM100 corridor from the Boone Mountain area to Elk Station (Elk suction), and an additional 3.5 miles from the proposed Elk Compressor location to DTI Ardell (Elk discharge).
  • A new interconnect (delivery point) with DTI near the DTI Ardell station, located in Elk County, Pennsylvania.
  • Miscellaneous facilities at the existing Lamont interconnection to accommodate the additional TGP Lamont delivery capacity created by the Segment 1 facilities.


National reserves the right to tailor the Segment 1 facilities expansion design to the specific requests submitted.


Although the Segment 1 expansion is offered here as a stand-alone project, the facilities outlined above will serve as a foundation for the comprehensive 82-mile W2E expansion described in National’s Open Season 154.  W2E is designed to transport approximately 425,000 Dth/day from National’s Overbeck/Line K area to interconnects at the Leidy hub including Transco at Leidy, Texas Eastern at Leidy, and Dominion at Leidy.  A portion of this capacity has been contracted for under binding precedent agreement(s).




Subject to FERC certification and construction of Segment 1 facilities, National anticipates providing Segment 1 transportation service as early as November 1, 2013. 




This Open Season commences on Wednesday November 16, 2011 and will close at 11:00 a.m. (EST) on Thursday January 19, 2012.


Participation in this Open Season is non-binding.




National requires a minimum fifteen (15) year term to support Segment 1 facilities.  A fifteen (15) year term is also required for the W2E project facilities described in OS154.



Project firm receipt points include:


  • Prospective interconnects to the new 24” pipeline.
  • Existing and proposed interconnects along National Fuel pipeline systems with access to Line FM100, Line FM120, Line K, Line YM52, Line GM97, Line AM60, and Line M.


Bidders are encouraged to contact their Marketing representative to discuss the geographical areas and pipeline systems from which the project facilities can receive gas and make deliveries to DTI and/or TGP.


Note: Unless waived by National pursuant to its tariff, primary receipt points without real time measurement, communication and control capability will not be eligible.  However, the commencement of service provided under this open season will not be contingent on the completion of either modifications to existing producer interconnects or construction of new producer interconnects.



The Segment 1 facilities will provide deliveries to a new interconnect with DTI near DTI’s Ardell compressor station.  They will also provide incremental capacity to the TGP Lamont point.


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




For the W2E Segment 1 project advertised in this Open Season, the initial incremental cost-of-service project unit rate (at 100% load factor, excluding surcharges) is expected to be approximately $0.35.  This rate is applicable to both DTI Ardell and TGP Lamont deliveries.  National anticipates that the applicable project fuel/LAUF rate will be our existing tariff rate of 1.4%.


DISCOUNT ELIGIBLE BIDS:  Shippers proposing receipt points that will deliver gas to National’s system east of the Boone Mountain area – either into existing pipelines or directly into the proposed 24” pipeline - are eligible for a discounted rate.  Such discounted requests must propose an initial volume of at least 20,000 Dth/d.  National has established a rate floor for such discounted capacity requests of $0.18.


National expects that monetary rates for the full 82-mile 2014 W2E expansion from Overbeck to Leidy (inclusive of Segment 1 facilities) will be in the $0.35-$0.40 range (at 100% load factor, excluding surcharges).  For Segment 1 subscribing Shippers transitioning to 2014 W2E capacity to Leidy, this rate will supersede the applicable Segment 1 rate.  The applicable 2014 W2E project fuel/LAUF rate is expected to be our existing tariff rate of 1.4%.


National reserves the right to modify the project rates in the tendered Precedent Agreements to reflect revisions to facilities design, cost estimates, and/or overall project economics.  National also reserves the right to propose incremental fuel rates in its FERC filing(s), depending on final design.



For the purposes of this Open Season, Anchor Shipper status shall be granted as outlined below:

(1) Anchor Shipper status shall be extended to bidders that have executed a binding precedent agreement in conjunction with W2E Open Season 154.  Such Shippers shall be entitled to the first allocation of Segment 1 capacity as long as Shipper meets the requirements of this Open Season, up to an amount equal to the aggregate capacity contracted for in bidders’ signed W2E Precedent Agreement(s).  

(2) Shippers requesting an initial volume of 30,000 Dth/d or greater of Segment 1 capacity shall also be designated as an Anchor Shippers.  Such bidders, to the extent that they do not have an executed W2E precedent agreement already in place, shall be entitled to the second allocation of Segment 1 capacity as long as Shipper meets the requirements of this Open Season.


Anchor Shipper status is not available to bidders requesting a discount.


In this Open Season, National will accept Segment 1 requests with a proposed start date of November 1, 2013.


Shippers may request all or part of the advertised project capacity. One-year ramp up requests are acceptable under the terms of this Open Season.  That is, bidders’ full volume must commence no later than November 1, 2014.  Anchor Shipper status as described above will be determined based on initial (November 1, 2013) volume.  Requests for fuel discounts will not be considered.


National will determine the specific amount of capacity (and the mix of receipt point requests) that can be awarded, taking into account the pipeline system hydraulics.  If requests exceed the project capacity, capacity will first be awarded to Anchor Shippers.  Bids for the remaining non-discounted capacity will be ranked and capacity awarded 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. The applicable project rate will be the $0.35 cost-of-service rate.


Once the non-discounted Segment 1 capacity is awarded, bids for Segment 1 capacity at discounted rates will be ranked and awarded using the same NPV methodology.


National reserves the right to maximize the amount of capacity awarded in this Open Season by considering the hydraulics and facility requirements associated with receipt point requests and any combination thereof, if applicable.  Equivalent winning bids that cannot be awarded in full will be awarded on a pro rata basis.  If all capacity created by the proposed Segment 1 expansion is not initially subscribed to Open Season bidders, National Fuel reserves the right to market this capacity post-Open Season and/or propose alternative volumes and rates with bidders without holding an additional Open Season.


Shippers interested in November 2014 W2E capacity to the Leidy hub without a commitment to Segment 1 capacity (and the corresponding firm deliveries to DTI Ardell or TGP Lamont) may submit such requests during this Open Season.  Such requests will be categorized as post-Open Season 154, and will be considered to have been received on the closing date of this Open Season.  These requests will not be subject to the Segment 1 bid award process outlined above.


For Shippers interested in having their awarded Segment 1 capacity transition to W2E capacity with deliveries to Leidy, National expects that Precedent Agreements resulting from this Open Season 179 will include language providing Shipper with a prospective change in primary delivery point (from DTI Ardell to a Leidy point) once the 82-mile W2E expansion is placed in service.  Shipper would agree to pay the applicable W2E cost of service rates.


All Open Season requests must be submitted on a Service Request Form.

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

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





Successful bidders will be required to execute and return precedent agreements within 20 business days after they are received.



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

Joe Kolis                     (716) 857-7520             kolisj@natfuel.com
Terry Falsone              (716) 857-7602             falsonet@natfuel.com
Gen Dispenza              (716) 857-6945            dispenzag@natfuel.com


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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