Spectra plans to build $3 billion natural gas pipeline to Florida

Pipeline company Spectra Energy has agreed to a $3 billion deal with Florida Power & Light to build a new natural gas pipeline between Alabama and Florida, the Houston-based company announced Friday afternoon.

The Sabal Trail project is expected to cost about $3 billion for the roughly 465 miles of natural gas pipeline, including 55 miles in Alabama, 196 miles in Georgia and 214 miles in Florida. It will be able to transport more than 1 billion cubic feet of natural gas per day.

The companies expect Sabal Trail to be completed in 2017. It will provide natural gas for industrial users and power generators, as well as local distribution companies throughout the Southeast.

Florida Power & Light will be an anchor customer for the new pipeline and has already booked about 60 percent of expected capacity, said Bill Yardley, Spectra’s president of transmission and storage. The utility company has said that it is working to switch its electricity generation to almost exclusively natural gas-fired, which has led to the need for a third pipeline.

“The good news is that the other pipelines to Florida are full, so any new incremental needs for gas is going to have to come by way of this pipeline,” Yardley said.

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Florida Power & Light initially put out the bid for a pipeline last December, according to Yardley.

“We are very excited to have been selected,” Yardley said. “I think it is a great example of a region that is weaning itself off of other fossil fuels, oil and coal in this case, and going out to bid for a three billion dollar pipeline.”

Spectra Energy and NextEra, the parent company for Florida Power & Light, formed a joint venture, Sabal Trail Transmission, to construct the pipeline.

“To continue meeting the growing needs of our customers efficiently and reliably in the years ahead, we will need more natural gas than the two existing major pipelines can deliver, which makes a third, independently routed pipeline system absolutely essential,” said FPL President Eric Silagy in a written statement. “Although Florida has essentially no natural gas reserves, many areas of our country have a wealth of supply.”

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