Tennessee Gas Pipeline Co.; National Fuel Gas Supply Corp.; Notice of Application

Take notice that on November 1, 2000, Tennessee Gas Pipeline Company (Tennessee) and National Fuel Gas Supply Corporation (National Fuel), collectively Applicants, filed an abbreviated application in Docket No. CP01-26-000 pursuant to sections 7(b) and 7(c) of the Natural Gas Act, as amended, and sections 157.7 and 157.14 of the Regulations of the Federal Energy Regulatory Commission (Commission), requesting a certificate of public convenience and necessity granting the Applicants authorization to amend the Hebron Storage Agreement in certain respects. The application is on file with the Commission and open to public inspection. This filing may be viewed via the internet at http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for assistance). Any questions regarding the application should be directed to Christopher D. Young, Senior Counsel, Tennessee Gas Pipeline Company, P.O. Box 2511, Houston, Texas 77252 at (713) 420-7239 or David W. Reitz, National Fuel Gas Supply Corp., 10 Lafayette Square, Buffalo, New York 14203 at (716) 857-7949.

The Applicants request that the Commission issue an order authorizing the reallocation of the Applicants' certified entitlements to storage capacity and delivery capacity at the Hebron Storage Field pursuant to an amendment to the Hebron Storage Agreement. Applicants indicate that upon receiving appropriate certificate authority, Tennessee's Assigned Storage Capacity will be reduced by 1.0 Bcf and National Fuel's will be increased by an equivalent amount, with a corresponding change to the Assigned Delivery Capacity of each party. Applicants summarize the change in storage capacity as follows:

Applicants state that, under the Hebron Storage Agreement, the Assigned Storage Capacity of a party is that portion of the Rated Storage Capacity that the Assigned Delivery Capacity of such party bears to the Rated Delivery Capacity of the storage field. The Applicants propose that the Assigned Delivery Capacity be fixed portions of the Rated Delivery Capacity: Tennessee's portion would be 80.31% and National Fuel's would be 19.69%, subject to change in the event that a future development program is implemented.

Applicants also request that the Commission approve an option for a limited term lease arrangement between Tennessee and National Fuel to provide a measure of flexibility to Tennessee for an interim period while Tennessee adjusts its arrangements for meeting its service obligations. Applicants propose that Tennessee have the option to lease from National Fuel storage capacity in the Hebron Field up to the amount transferred to National Fuel (1 Bcf). Applicants also propose that such lease provide for a delivery capacity up to the amount transferred to National Fuel. The rates for the optioned capacity would be equal to Tennessee's maximum tariff rate for firm storage service. Such lease would terminate at Tennessee's option on either the first or second March 31st after acceptance of Commission authorization by both Tennessee and National Fuel. Applicants claim that a lease of capacity is justified since National Fuel could not provide capacity to Tennessee on a field-specific basis under its Part 284 firm storage services.

Applicants also propose that Tennessee have the option to become the operator of the storage facilities at the Hebron Storage Field in place of National Fuel. Under the current storage agreement National Fuel operates the storage properties and Tennessee operates the station facilities. Additionally, subject to a mutual agreement between the parties, National Fuel will continue to perform certain day to day operation and maintenance responsibilities under a contract with Tennessee. National Fuel would also retain certain administrative responsibilities relating to leases, royalties and other payments.

Applicants also propose to modify the termination and assignment provisions of the Hebron Storage Agreement and to extend the term of the Hebron Storage Agreement for a period of ten (10) years.

Any person desiring to be heard or to make any protest with reference to said application should on or before November 29, 2000, file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, D.C. 20426, a motion to intervene or protest in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214) and the regulations under the NGA (18 CFR 157.10). All protests filed with the Commission will be considered by it in determining the appropriate action to be taken but will not serve to make the protestants parties to the proceeding. Any person wishing to become a party in any proceeding must file a petition to intervene in accordance with the Commission's rules. Comments and protests may be filed electronically via the internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at http://www.ferc.fed.us/efi/doorbell.htm.

Take further notice that, pursuant to the authority contained in and subject to the jurisdiction conferred upon the Commission by Sections 7 and 15 of the NGA and the Commission's Rules of Practice and Procedure, a hearing will be held without further notice before the Commission or its designee on this application if no petition to intervene is filed within the time required herein, if the Commission on its own review of the matter finds that the proposal is required by the public convenience and necessity. If a petition for leave to intervene is timely filed, or if the Commission on its own motion believes that a formal hearing is required, further notice of such hearing will be duly given. Under the procedure provided for, unless otherwise advised, it will be unnecessary for the Applicants to appear or to be represented at the hearing.