02-908. CMS Trunkline LNG Company, LLC; Notice of Application

January 9, 2002.

Take notice that on December 26, 2001, and supplemented on January 7, 2002, CMS Trunkline LNG Company, LLC (Trunkline LNG), P.O. Box 4967, Houston, Texas 77210-4967, filed an application in the above-referenced docket number pursuant to section 7(c) of the Natural Gas Act (NGA) and part 157 of the Commission's Rules and Regulations, for a certificate of public convenience and necessity authorizing the construction, operation and maintenance of additional facilities at its LNG Terminal located in Calcasieu Parish, Louisiana. The application is on file with the Commission and open to public inspection. This filing may be viewed on the web at http://www.ferc.gov using the “RIMS” link, select “Docket#” and follow the instructions (please call [phone] for assistance).

Trunkline LNG proposes (1) to expand the storage capacity of its terminal by constructing and operating a fourth cryogenic storage tank with a capacity of 140,000 cubic meters; (2) to increase its sustainable daily sendout capability from 630 MMcf per day to 1,200 MMcf per day by constructing and operating additional LNG pumps and LNG vaporizers; (3) to construct and operate a second marine unloading dock; and (4) appurtenant supporting facilities. Currently, all re-gasified LNG is transported from Trunkline LNG's terminal by CMS Trunkline Gas Company, LLC's pipeline facilities (Trunkline Gas) which have a certificated capacity of 1.0 Bcf per day. Concurrently, Trunkline Gas is filing an application, Docket No. CP02-55-000, requesting a certificate of public convenience and necessity authorizing Trunkline Gas to modify its existing metering facilities to accommodate the proposed increased LNG deliveries.

Trunkline LNG conducted an open season for the future use and potential expansion of its terminal, from December 15, 2000 to February 15, 2001. As a consequence, Trunkline LNG entered into the contracts with BG LNG Services, Inc. (BG LNG). In May 2001, Trunkline LNG and BG LNG entered into a firm service agreement (Base Agreement) for all the current uncommitted capacity at the Terminal. The 22-year contract, which begins in January 2002, gives BG LNG the firm service rights to all of the Terminal's current uncommitted vaporization and storage capacity of approximately 5.1 Bcf at the currently effective maximum tariff rate under Rate Schedule FTS. The contract storage capacity will increase to 6.3 Bcf after the existing contract with Trunkline LNG's existing customer, Duke Energy LNG, expires in August 2005. In addition to the Base Agreement, Trunkline LNG and BG LNG entered into an agreement (Precedent Agreement) that sets the parameters for a second firm service agreement (Expansion Agreement) utilizing the capacity associated with the Expansion Project. In essence, the Precedent Agreement provides for BG LNG to obtain additional firm storage capacity of 2.7 MMDt and daily sendout capability of 570,000 Dt per day at the Terminal from January 1, 2005 until December 31, 2023.

The proposed construction will take place entirely on Trunkline LNG's property already dedicated to its terminal. No new land or rights-of-way are required for the proposed expansion.

Trunkline LNG estimates that the total capital cost of constructing its proposed expansion will be approximately $149.1 million, excluding AFUDC. Trunkline LNG estimates that AFUDC will total $28.1 million. The total capital cost including AFUDC will be approximately $177.2 million. The total Cost of Service associated with the expansion project will be approximately $54.2 million. The initial incremental recourse rates proposed by Trunkline LNG for service utilizing the expansion facilities are traditional cost-of-service based rates, using the straight-fixed variable rate design methodology. The incremental recourse rates have been designed on 100% of the costs associated with the Expansion Project. The incremental recourse reservation rate will be $0.5208 per Dt for service under proposed Rate Schedule FTS-2, using design units based on the incremental storage capacity associated with the Expansion Project.

Any questions regarding the application be directed to William W. Grygar, Vice President, Rates and Regulatory Affairs, CMS Trunkline LNG Company, LLC, P.O. Box 4967, Houston, Texas 77210-4967 at [phone].

There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before January 30, 2002, file with the Federal Energy Regulatory Commission, 888 First Street, NE, Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR parts 385.214 or 385.211) and the Regulations under the NGA (18 CFR part 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 14 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.

However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.

Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commenters will not be required to serve copies of filed documents on all other parties. However, the non-party commenters will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.

The Commission may issue a preliminary determination on non-environmental issues prior to the completion of its review of the environmental aspects of the project. This preliminary determination typically considers such issues as the need for the project and its economic effect on existing customers of the applicant, on other pipelines in the area, and on landowners and communities. For example, the Commission considers the extent to which the applicant may need to exercise eminent domain to obtain rights-of-way for the proposed project and balances that against the non-environmental benefits to be provided by the project. Therefore, if a person has comments on community and landowner impacts from this proposal, it is important either to file comments or to intervene as early in the process as possible.

Comments, protests, and interventions may be filed electronically via the internet in lieu of paper. See, 18 CFR part 385.2001(a)(1)(iii) and the instructions on the Commission's web site under the “e-Filing” link.

If the Commission decides to set the application for a formal hearing before an Administrative Law Judge, the Commission will issue another notice describing that process. At the end of the Commission's review process, a final Commission order approving or denying a certificate will be issued.

C.B. Spencer,

Acting Secretary.