Destin fails to draw support for southern U.S. gas line project

NEW YORK, July 17 Wed Jul 17, 2013 3:55pm EDT

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NEW YORK, July 17 (Reuters) - Destin Pipeline Co LLC said on Wednesday it would not move forward with expansion plans on its onshore natural gas pipeline system in the U.S. South after failing to garner sufficient interest in the project.

The company said in a company website posting that it had concluded two open seasons for existing and expanded capacity on its pipeline system, but did not receive enough binding offers for transportation.

Destin added that it would accept requests for firm transportation service for any remaining available capacity on a first come first served basis.

The 225-mile Destin gas pipeline system is majority-owned by BP Plc's Amoco Destin Pipeline Co, with Enbridge Inc's Enbridge Offshore owning a 33 percent stake.

It has the capacity to carry 1.2 billion cubic feet per day from offshore wells in the Gulf of Mexico to the Pascagoula natural gas processing plant, where it extends north and connects with nine major interstate gas lines.

Recent pipeline and gas processing plant additions in the Marcellus Shale region in the U.S. Northeast and from the Rockies have diminished the need for supplies from the Gulf of Mexico.

Early in the last decade, supplies from the U.S. Gulf of Mexico helped meet more than 20 percent of U.S. natural gas needs. That was down to a little over 6 percent as of last year.

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