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The Jamestown Board of Public Utilities (BPU) today approved a contract to purchase the pipeline currently used to transport natural gas from Mayville to the Carlson Generation Station (Power Plant) in Jamestown.
The $5.4 million dollar transaction with Emkey Transportation, Inc., which sought to sell the pipeline, will transfer ownership of the pipeline to the BPU. Emkey Gathering, LLC, which currently operates the pipeline and equipment, will continue to operate and perform maintenance on the pipeline and equipment under a separate agreement.
Emkey Transportation, Inc., is an affiliate of Emkey Energy, LLC. This Erie, Pennsylvania, based company owns and operates Emkey Gathering, LLC. The pipeline and equipment to be purchased by the BPU was previously owned by Nornew Energy Supply. The system has been in use since 2001 when the BPU began to operate gas-fired equipment at the Carlson Station including the LM6000 gas turbine generator.
The service Emkey currently provides was structured through a lease agreement established in 1999. The new pipeline ownership contract will supersede the original lease agreement, enabling the BPU to continue receiving service through and beyond the expected 30-year life of the LM6000 unit.
Under the contract, the BPU will become the owner of approximately 27 miles of underground pipeline and associated equipment which includes a natural gas fuel compressor located in Mayville and its interconnection to the Tennessee Gas Pipeline. The Tennessee Gas Pipeline is a major interstate system used to transport natural gas from facilities located in southern states such as Louisiana, to northeastern states such as New York.
This combined system has proven to be a reliable and cost effective resource to provide fuel to the BPU’s power plant, according to BPU General Manager David L. Leathers.
“No significant changes to the manner in which the Carlson Station receives fuel will occur,” states Leathers. “The pipeline and equipment which the BPU will acquire also has the ability to deliver fuel produced by wells located in Western Chautauqua County and Northwestern Pennsylvania.”
“In executing this contract,” continues Leathers, “We will be providing cost certainty for our customers across the next 15-20 years, as well as securing an extremely important supply of natural gas to support current and future operations at the Power Plant.”
“As part of the overall agreement,” adds Board Chair Chuck Cornell, “Emkey Gathering, LLC, will continue to operate and maintain the gas pipeline for a period of ten years. The BPU will pay a separate monthly fee for this service.”