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Gas pipeline project dropped

| Wednesday, June 26, 2002

Keith Beacham heaved a sigh of relief this week after learning plans for construction of the $678 million Independence Pipeline had been dropped.

"This is good news," said Beacham, who lives outside of Portersville and is a vice president of the Ohio and Pennsylvania Landowners Association, which has been fighting the project.

The natural gas pipeline would have run through Butler and Lawrence counties, stretching from Defiance, Ohio, to Leidy, Clinton County. Insufficient market share killed the project, officials with the handful of companies involved in the project said.

Beacham said the landowners association was planning a series of picnics in Ohio and Pennsylvania to celebrate the good news.

Company officials, however, were not in a celebratory mood.

"The market for the project simply has not developed to the point where we can proceed with it," Joe Martucci, a spokesman for the companies, said Tuesday. "Basically, we're looking to abandon the project as it now stands."

Before construction could begin, the Federal Energy Regulatory Commission required that 68 percent of the capacity of the pipeline be under contract, Martucci said.

"It looks to us like it's just not going to be possible to find that level of market support, which is necessary to go forth with the project," he said.

The pipeline was to be built and operated by Independence Pipeline Co., a general partnership formed by ANR Pipeline Co. in Detroit, Transcontinental Gas Line Corp. in Tulsa, Okla., and National Fuel Gas Co. in Buffalo, N.Y.

Independence officials submitted papers Monday with the regulatory commission requesting that the company's certificate to proceed with the project be vacated.

The commission, which issued the certificate allowing the project in July 2000, is expected to take formal action today.

Although Independence did acquire some easements, construction never began, Martucci said.

"We never got to the big-ticket items of purchasing pipe, purchasing compressors, letting contracts or that sort of thing," he said.

Beacham said he and others opposed to the project have insisted all along Independence never would get the required market support.

The pipeline was to have connected with other pipelines in the mid-Atlantic and Northeast regions, company officials said.

Independence officials said the pipeline would help "the capacity-constrained eastern United States" by providing natural gas from the Midwest.

But the Beachams and other opponents argued there was sufficient natural gas available in the East.

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