Destin Pipeline is seeking shipper interest in both existing and additional capacity on its natural gas transmission system in response to increaseing demand in Florida and additional capacity freed up by a drop in offshore production.
Destin on Monday launched concurrent binding open seasons that run through April 30 for firm transportation on its onshore system from Clarke County, Mississippi, south to the pipeline's Pascagoula Station, in Jackson County, Mississippi.
One of the binding open seasons is for up to 360,000 Mcf/d of existing capacity that would become available November 1, 2014, upon the expiration of existing rate schedule FT-1 service agreements.
The second open season is for up to 380,000 Mcf/d of new capacity the pipeline is seeking to build and is expected to be available beginning May 1, 2015, upon completion of certain expansion facilities.
Destin's proposal for adding capacity to its system comes as current offshore production into the pipeline is down about 16% from this time last year, according to data from Platts unit Bentek Energy.
Meanwhile, gas is being increasingly used for power generation, particularly in the southeastern US. Florida -- which sees its highest power usage in the summer -- saw gas usage for power generation average around 3.57 Bcf/d from June to August last year, an increase of nearly 63,000 Mcf/d over the same time in 2011, Bentek data show.
Overall, natural gas deliveries into the state to electric power consumers averaged around 1.1 Bcf/d in 2012, up from less than 800,000 Mcf/d in 2008 and up from about 365,000 Mcf/d in 2000, according to the US Energy Information Administration.
The increased reliance on gas is reflected in regional prices as well. Spot prices at Florida Gas Transmission zone 3 are averaging around $3.55/MMBtu so far this year, a slightly more than $1 higher than in the same period of last year.
Platts forward curves show summer prices averaging $3.88/MMBtu so far this year, reflecting a nearly $1 premium over the comparable summer strip at the same time last year.
