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Notice of Open Season 195
Northern Access 2016 Long Term Firm Transportation Capacity to Empire(Pendleton)


POSTED: 6/3/2014
- 6/26/2014
7/15/2014: 350,000 Dth/d of Firm Transportation Capacity has been awarded to the foundation shipper. No other requests were received.





Northern Access 2016


Long Term Firm Transportation Capacity to Empire (Pendleton)



National Fuel Gas Supply Corporation (“National”) is pleased to announce, in cooperation with Empire Pipeline, Inc. (“Empire”), the commencement of a binding Open Season for firm transportation service to National's existing interconnection with Empire at Pendleton ("Pendleton"), providing shippers with direct access to Empire on-system and off-system points, including Canadian markets available via Empire's interconnection with TransCanada Pipeline ("TCPL") at Chippawa.


Together the National and Empire projects are referred to as the "Northern Access 2016" project, and will require certain pipeline upgrades and modifications on National’s system as further detailed in the sections below.




Project Highlights

  • Makes available new south-to-north transportation capacity on the National system from the producing area of McKean County, Pennsylvania to Empire at Pendleton and to the Tennessee Gas Pipeline (“TGP”) 200 Line
  • Capacity:  Approximately 350,000 Dth/day
  • Receipt Point(s):  Producer or gathering interconnects in McKean County, Pennsylvania, or points along the Transportation Path as defined below.
  • Delivery Points:  Empire at Pendleton, and TGP 200 Line
  • Term:  15 years minimum
  • Proposed In-Service Date:  November 1, 2016
  • Open Season period: June 3, 2014 through June 26, 2014
  • A precedent agreement with one "Foundation Shipper" (as defined in the "Shipper Status" section below) has been executed, and is the basis for this Open Season offering.   Other parties interested in becoming a Foundation Shipper may do so by participating in this Open Season and meeting the Foundation Shipper requirements.



The Northern Access 2016 project will provide shippers with the opportunity to take advantage of National’s  strategic footprint and the access it provides from the Marcellus and Utica producing areas of Pennsylvania.  With deliveries to Empire at Pendleton, the project's incremental firm transportation capacity provides access to Canadian markets at Chippawa, along with other key Empire and National on-system and off-system points.


Depending on details of Open Season requests, this project would make available approximately 350,000 Dth/day of new firm transportation capacity with an anticipated in-service date of November 1, 2016.


National expects that the expansion facilities for the project will include one or more of the following:

  • New pipeline laterals to producing areas
  • New, looped, and/or replacement pipeline(s)
  • Compression expansions


Participation in this Open Season is binding for Foundation Shippers and otherwise is non-binding for other bidders and Empire.



Transportation Paths, Expected Quantities, and Indicative Rates

In this offering, National will consider requests that propose the project transportation path ("Transportation Path") described below. 

  • Transportation Path – Receipts into National (or proposed extensions of the National system) in McKean County, Pennsylvania, with a northerly path for delivery to Empire at Pendleton. Existing and prospective receipt points along the Transportation Path may also be requested in this Open Season.
  • Indicative Rate ~ $14.0051 per Dth/month  (or $0.4604 100% load factor unit rate)**
  • Project Volume - Approximately 350,000 Dth/day


**Actual rates will be based on the cost of service of the final facility design and market.

National expects that Northern Access 2016 shippers will be subject to the Transportation Fuel and Company Use Retention and Transportation LAUF Retention (collectively “Transportation Fuel/LAUF”) charges in accordance with National’s tariff, or as otherwise required by FERC in the project Certificate order.


The firm transportation services offered in this Open Season will be subject to the terms of the Firm Transportation (“FT”) rate schedules contained in the National tariff. National expects to establish an incremental recourse rate applicable to any new FT services resulting from this Open Season. National reserves the right to propose in customer agreements an incremental transportation rate and/or Transportation Fuel/LAUF fuel rate that is based upon aggregate Open Season interest, project design, post-open season construction estimates, and overall project economics.


The total amount of firm transportation capacity to be awarded in this Open Season will depend on the requested receipt and delivery points, system hydraulics, and the system capabilities from requested receipt points.  Based on certain combinations of these and other factors, National reserves the right, in its sole discretion, to develop, revise, and optimize the resulting project(s) design and modify the amount of awarded transportation capacity to be greater or less than any estimated amounts listed above.  National further reserves the right to proceed with one or more projects that will be defined through the contracting process and to develop alternative projects from the requests received during this Open Season representative of the timing requested and markets served.


Receipt and Delivery Points

The primary receipt points available for this firm capacity offering include existing and prospective producer and pipeline interconnects with National in McKean County, Pennsylvania and points along the Transportation Path described above.   Interested parties are encouraged to contact National to discuss their specific receipt point requirements.  Shippers will be responsible individually for the cost of any required receipt point facilities.


Unless waived by National pursuant to its tariff, primary receipt points must have real time measurement, communication and control capability.  However, the commencement of firm transportation 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 firm transportation capacity offered in this Open Season will have a firm delivery point of Empire at Pendleton or the TGP 200 Line.



Shipper Status

For the purposes of this Open Season, National will offer "Foundation Shipper" status to any shipper that makes, or has made, a commitment to the project under a signed Precedent Agreement with a minimum fifteen (15) year term commitment, and a contract quantity of at least 350,000 Dth/day at the indicative contractual monthly reservation rate of $14.0051 per Dth ($0.4604 on a 100% load factor basis).  Foundation Shippers will not be subject to proration, other than the proration required if National receives multiple Foundation Shipper commitments as a result of this Open Season.



National requires a minimum term of fifteen (15) years for all transportation services requested in this Open Season.



Projected In-Service Date

Subject to sufficient and timely market commitments and necessary regulatory approvals, National expects the required facilities could be completed and transportation service could begin by November 1, 2016



Bid Award Process

During the Open Season period, National will accept requests for the transportation service described above beginning November 1, 2016 under the FT rate schedule.  Shippers may request all or part of the available capacity, and are allowed to revise their bids within the posting period.  National will not consider bids requesting a start date later than November 1, 2016.


Requests for rate discounts or discounts of Transportation Fuel/LAUF will not be accepted.


Capacity will first be made available to qualified Foundation Shipper(s) and, if necessary, allocated pro rata to Foundation Shippers based on quantity requested.  Second, in the event National receives valid requests for service from other shippers who do not qualify for Foundation Shipper status, and capacity remains available after Foundation Shipper awards, acceptable requests will be ranked and 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. 


Equivalent winning bids that cannot be awarded in full will be awarded on a pro rata basis.  In the event that bids are submitted in excess of the available capacity and they must be prorated, the bids will be prorated based on the quantities requested.


National also reserves the right to maximize the amount of capacity awarded in this Open Season by considering the hydraulics and facility requirements associated with receipt and delivery point requests.  National will award capacity to the combination of bids that generate the highest net present value for National.


National is not obligated to proceed with any facilities expansion project.  National may proceed with such projects, but only if it is able to execute precedent agreements acceptable to it, with term, quantity, and rate provisions that economically justify the project.


Precedent Agreements

Participation in this Open Season is binding for bidders requesting Foundation Shipper status.  All such requests must be made by (1) submitting a completed Service Request Form on or before June 16, 2014, and (2) executing and returning a Precedent Agreement  agreed upon by shipper and National prior to the close of the Open Season. The Precedent Agreement must be executed by an officer of bidding entity.


Requests by Non-Foundation Shippers must be made by submitting a completed Service Request Form on or before the close of this Open Season.  Non-Foundation Shippers who are awarded capacity in this Open Season must enter into discussions leading to execution of a binding Precedent Agreement.  Once tendered, such agreements must be executed by an officer of the bidding entity and returned to National within 20 business days.



Turnback Capacity Solicitation

Any existing shipper who currently holds firm transportation on National that it believes (subject to National’s evaluation and confirmation in its sole discretion) could be used in lieu of a portion(s) of the proposed project is invited to notify National of its desire to permanently relinquish its capacity for use in the project.  Any shipper who desires to turn back such capacity must provide a binding notice to National, in writing, by the close of this Open Season, of the MDQ, term, receipt point(s), delivery point(s), contract number(s), the reservation rate at which the shipper offers to release the capacity back to National and any other relevant information necessary to effectuate the permanent relinquishment of such capacity.  Such binding offer shall be subject to acceptance by National.  Further, turnback requests are subject to rejection or proration based upon the results of this Open Season and this solicitation as determined by National in its sole discretion.  National may reject any turnback request that would not leave it economically indifferent between the turnback offer and the proposed expansion. The shipper turning back capacity shall remain responsible for any difference between the rate at which the capacity is turned back to National and the reservation rates under the project shipper(s) firm transportation service agreement with National for the remaining term of the turnback shipper’s firm transportation service agreement, but will not be responsible for commodity charges, ACA, Fuel and Loss retention, or any other usage charges associated with the turnback capacity, nor shall shipper be entitled to any credits associated with such capacity.


National reserves the right to reject, in its sole discretion, any turnback offers that are incomplete, contain modification to the terms of this solicitation, or are submitted with any conditions that are economically disadvantageous to National.  The final design of the Project will be based, in part, on the results of this turnback solicitation.


For accepted turnback requests, shipper and National shall be required to execute an agreement.  Such agreement shall be tendered by National to shipper no later than 20 business days after the close of this Open Season. 


Open Season Information

This Open Season commences June 3, 2014 and expires at 11:00 a.m. (Eastern Time) on June 26, 2014.  As noted in the sections above, all Open Season requests must be submitted utilizing a Service Request Form.  The completed form may be submitted online or via mail or fax.




For more information, please contact:


Joe Kolis




Terry Falsone




Anthony Limina





The results of this Open Season will be posted on National’s website,











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