Notice Text:

Subject: Binding Open Season for Transco's Regional Energy Access & Additional Interim Capacity in Zone 6

Transcontinental Gas Pipe Line Company, LLC (“Transco”) hereby announces a binding open season for its Regional Energy Access Expansion (referred to herein as the “Project”) and for interim firm transportation service to be made available on its Marcus Hook and Trenton Woodbury Laterals in Zone 6 (“Interim Service”), as defined below.

The binding open season will begin at 9:00 a.m. C.D.T. on March 29, 2021 and end at 3:00 p.m. C.D.T. on April 2, 2021 (“Open Season Period”).

Project Description

The Project is an expansion of Transco’s existing interstate natural gas pipeline system in Zone 6 which will provide incremental, year-round firm transportation capacity to be made available by a target in-service date of December 1, 2023.  By utilizing Transco’s existing assets to the greatest extent possible, the Project aims to minimize environmental impacts while meeting the region’s growing demand for natural gas, including existing local distribution companies and power generators in Pennsylvania and New Jersey. 

Transco has already conducted initial and supplemental open seasons for the Project. The purpose of this supplemental open season is to solicit bids for capacity that has become available under the Project as a result of Transco increasing the available receipt and delivery point combinations for up to 223,000 dekatherms of natural gas per day (“dt/d”) of firm transportation capacity under the Project. The new paths will extend from Transco’s proposed interconnection with Williams Field Services Company, LLC’s pipeline in Luzerne County, Pennsylvania at or near milepost 21.84 on the proposed Regional Energy Lateral (“Puddlefield B Receipt Point”), to the following delivery points:

1. 93,000 dt/d will extend to Transco’s existing Morgan delivery meter station in Middlesex County, New Jersey at or near milepost 12.04 of the existing New York Bay Lateral (“Morgan Delivery Point”); and
2. 130,000 dt/d will extend to Transco’s existing Chesterfield delivery meter in Burlington County, New Jersey at or near milepost 15.45 of the existing Trenton Woodbury Lateral (“Chesterfield Delivery Point”).

Prior to the commencement of this supplemental open season, Transco executed a binding precedent agreement with one shipper for firm transportation capacity to be provided under the Project from the Puddlefield B Receipt Point to the Morgan Delivery Point and Chesterfield Delivery Point (“Committed Shipper”). In consideration of the Committed Shipper’s subscription to the firm capacity under the Project and its agreement to the receipt and delivery profiles and capacity that make the Project competitive and economically viable for Transco to pursue, up to 44,600 dt/d of the Committed Shipper’s capacity under the Project is subject to being reallocated to accommodate any bids accepted by Transco pursuant to this supplemental open season.

Accordingly, Transco is hereby offering up to a total of 44,600 dt/d of firm transportation capacity from Transco’s proposed Puddlefield B Receipt Meter Station to the above-described delivery points, as follows:

1. 18,600 dt/d to the Morgan Delivery Point; and
2. 26,000 dt/d to the Chesterfield Delivery Point.

Interim Service Description

Transco also plans to install the necessary facilities to allow it to provide interim firm transportation service of up to 130,000 dt/d from the proposed interconnection between Transco’s Marcus Hook Lateral and the Adelphia Gateway, LLC pipeline in Delaware County, Pennsylvania (at or near milepost 18.7 on the Marcus Hook Lateral) (“Adelphia–West Ridge Receipt Interconnection”) to the Chesterfield Delivery Point. This capacity would be made available by a target in-service date of November 1, 2021 and would remain available until the in-service of the Project.

The Interim Service will be provided from the Adelphia–West Ridge Receipt Interconnection to the Chesterfield Delivery Point following a northeasterly path along the Marcus Hook and Trenton-Woodbury Laterals.

The Interim Service will be contingent upon Interim Service shippers causing delivery of gas at the Adelphia–West Ridge Receipt Interconnection: (i) up to the shipper’s Transportation Contract Quantity and (ii) at pressures sufficient to enter Transco’s pipeline at the then prevailing pressure on Transco’s pipeline, up to Transco’s MAOP of 800 psig. Transco shall not be required to deliver gas under the Interim Service at any time that deliveries at the Adelphia–West Ridge Receipt Interconnection are not made in accordance with the foregoing conditions. For the avoidance of doubt, in no event shall Transco be liable in any manner, and in no event shall Interim Service shippers be eligible for any demand charge credits, if Transco is unable to make deliveries at the Chesterfield Delivery Point due to deliveries of gas at the Adelphia–West Ridge Receipt Interconnection at pressures insufficient to enter Transco’s pipeline at the then prevailing pressure, up to Transco’s MAOP of 800 psig.

Map: A map depicting the foregoing is available here.

Rates

The firm transportation service described herein will be performed under Transco’s Rate Schedule FT and Part 284(G) of the Federal Energy Regulatory Commission’s (“FERC”) regulations. 

Shippers under the Project may elect to pay the maximum Rate Schedule FT reservation rate applicable to firm transportation service under the Project, as such rate may change from time to time (such rate is referred to herein as the “Recourse Rate”).  Transco also will offer shippers a negotiated reservation rate for firm transportation service under the Project. Additional details regarding the Recourse Rate and negotiated reservation rate will be set forth in the pro forma precedent agreement for the Project, which shippers may request from Transco by following the instructions set forth below under the heading “Pro Forma Precedent Agreements.” In addition to the Recourse Rate and negotiated reservation rate, Project shippers will be responsible for compressor fuel and line loss make-up retention, electric power charges, commodity charges and all applicable surcharges as approved by the FERC for firm transportation service under the Project.

Shippers under the Interim Service will be subject to Transco’s Zone 6 to Zone 6 FT rates, and such Shippers may elect to pay the maximum Zone 6 to Zone 6 FT reservation rate or a lower reservation rate.  Transco may consider, but will not be obligated to accept, reservation rate bids below the applicable maximum FT reservation rate. In addition, Interim Service shippers will be responsible for compressor fuel and line loss make-up retention, electric power charges, commodity charges and all applicable surcharges as approved by the FERC for Rate Schedule FT service in Transco’s Zone 6.

Term

Shippers’ requests for firm transportation service for the Project under this supplemental open season must be for a primary term of at least 15 years.

Shippers’ requests for firm transportation service for the Interim Service under this supplemental open season must be from the target commencement of service of November 1, 2021 until the in-service date of the Project.  

Creditworthiness

The terms and conditions governing Transco’s creditworthiness requirements are set forth in the pro forma precedent agreement for firm transportation service under the Project and/or the Interim Service.  Any shipper desiring to request firm transportation service under the Project and/or the Interim Service must provide to Transco a completed credit application form.  (Click here for Transco’s Online Credit Application Form.)  Credit support, including but not limited to letters of credit and guaranties, may be required by Transco to be effective upon execution of the precedent agreement.

Pro Forma Precedent Agreement

Transco will provide a copy of the pro forma precedent agreement for the Project and/or the Interim Service upon request by any potential shipper; provided, that Transco and such shipper shall have first entered into a confidentiality agreement in substantially the form of this pro forma confidentiality agreement.  All requests for the pro forma precedent agreement should be directed to Amanda Livanos by telephone at (832) 817-0394 or at the address provided on the attached Request Form.

Open Season Procedure

Any shipper desiring firm transportation service under the Project and/or the Interim Service must complete and submit to Transco the Binding Open Season Transportation Request Form (“Request Form”) and the credit application referenced under ”Creditworthiness” above before expiration of the Open Season Period.  In addition, shippers will be required to execute and deliver to Transco before 3:00 p.m. CDT on April 2, 2021 (or such later date as may be announced by Transco) a precedent agreement for firm transportation service under the Project and/or the Interim Service in substantially the form of the pro forma precedent agreement provided by Transco according to the process referenced above.  All submissions for this binding open season should be emailed to amanda.livanos@williams.com.  Transco will not accept any submissions received after expiration of the Open Season Period.

Transco will evaluate all complete Request Forms and determine the best bid or combination of bid(s) that will result in the largest total aggregate net present value (“NPV”) for the Project and the Interim Service.  Transco will not accept any bid for either project that is less than the full contract path identified above for such project.  Transco will not accept any bid for either project that is less than the full term identified above for such project.  Transco may consider, but will not be obligated to accept, reservation rate bids that are for less than the applicable maximum FT reservation rate as stated above.  In addition to the accepted reservation rate(s), all applicable maximum rate commodity charges, surcharges, and fuel will apply.  Transco reserves the right to accept any one bid or combination of bids that will result in the largest total aggregate net present value (“NPV”) for the projects offered.  Transco will utilize the following bid evaluation method for each valid bid submitted in response to the open season solicitation:

The NPV of each project shall be determined using the following formula:

Where:

i = monthly payment period

n = term in months

R = incremental monthly reservation revenue (Bid Qty (Dt/d) * Bid Daily Rate ($/Dt) * # Days in month i)

DR = monthly discount rate of 0.8333%

The NPV of each project bid by any party will be summed to determine the best bid.  In the event there is more than one best bid, capacity will be allocated on a pro rata basis.

Transco reserves the right to reject any requests for service under the Project and/or the Interim Service on a not unduly discriminatory basis.

If you have any questions regarding this binding open season please contact amanda.livanos@williams.com at (832) 817-0394.