The Sabal Trail pipeline from Alabama to Central Florida has scored a new investor and a new customer. And they both happen to be Duke Energy.
The electric utility has purchased a 7.5 percent share in the $3 billion project for $225 million. The 36-inch, 500-mile pipeline will connect to the Transco pipeline carrying natural gas from the Gulf of Mexico.
Duke Energy plans to siphon up to 293 million cubic feet of natural gas daily for its proposed 1,640-megawatt Citrus County Combined Cycle plant. This would make Duke one of the largest customers to contract from the Sabal Trail pipeline. With an option to purchase up to 98 million more cubic feet daily, the utility could eventually account for more than 35 percent of pipeline capacity.
Notably, Natural gas plants generate 62 percent of Florida’s electricity.
The pipeline’s other major customer will be Florida Power & Light. Its parent company, NextEra Energy, owns 33 percent of the project. Spectra Energy, principal owner and builder, owns 59.5 percent. Spectra Energy was part of Duke Energy until 2007, when it became a separate entity.
For Duke, this is the second of two pipeline investments. It is also putting up to $2 billion into the Atlantic Coast pipeline, which is not expected to be complete until 2018. Construction of the Sabal Trail pipeline should start later this year for completion in 2017. Electricity customers will not be charged for construction of either pipeline.
Photo credit: Spectra Energy