Phase IV Pipeline Expansion

Gulfstream has reached an agreement with Progress Energy to provide 155,000 dekatherms per day of natural gas transportation service to serve Progress's Bartow Power Plant in Pinellas County, Fla. This pipeline project is known as Gulfstream's Phase IV expansion. The project will involve construction of approximately 17.8 miles of 20-inch pipeline in Tampa Bay connecting the existing Gulfstream pipeline to the Bartow Power Plant. The project will also require the installation of additional compression in Coden, Ala., and Manatee County, Fla.

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CONSTRUCTION UPDATE
May 1, 2008 -- Offshore construction continues. The pipe lay barge and directional drilling barge are working in Tampa Bay.

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PROJECT OVERVIEW

Power Plant Modifications
Progress Energy has announced plans to modify its Bartow Power Plant site in Pinellas County to re-power its existing oil-fired generation capacity with cleaner-burning natural gas-fired generation capacity. The conversion is estimated to reduce emissions of sulfur dioxide, nitrogen oxides and particulates by more than 90 percent.

Proposed Route
The proposed route extends approximately 17.8 miles from the existing Gulfstream pipeline in the vicinity of Port Manatee north across the middle bay to the existing Bartow Power Plant on the east shore of St. Petersburg. Gulfstream is committed to working with appropriate environmental agencies to identify a route that ensures the least environmental disturbance.

Sub-sea Survey
In early 2006 Gulfstream researchers surveyed a 1,000 foot-wide corridor in Tampa Bay to examine the seafloor for hard-bottoms, submerged aquatic vegetation, archeological points of interest and potential construction hazards. The data generated from these surveys has helped Gulfstream identify environmentally sensitive areas to be avoided for planning the proposed pipeline route. Surveys were conducted using magnetometer, side scan sonar, sub-bottom profiler, and echo sounder technology.

Construction Methods
Offshore construction will consist of two primary construction methods:

• Horizontal directional drilling - This technology will enable Gulfstream to avoid sensitive environmental areas and also cross existing waterways (or channels), while burying the pipe at depths greater than could be achieved with traditional trenching. Gulfstream is planning at least five of these drills.
• Pipe-lay barge - A shallow-water pipe-lay barge will be used during the 8-month offshore construction process.

Environmental Commitment

• The proposed route minimizes impacts within Pinellas County Aquatic Preserve by avoidance and directional drilling.
• The pipeline route will avoid soft and hard live-bottoms and sea grasses almost entirely.
• Manatee spotters will monitor for the presence of manatees and other critical species during construction.
• Once Phase IV is in operation and the Bartow Plant is repowered to use natural gas instead of oil.
• Sulfur dioxide, nitrogen oxides and particulate emissions from the plant will be reduced more than 90% from present levels.

Manatee County Compressor Facility

The project will include construction of a 30,000-hp natural gas pipeline compressor facility in Manatee County, Fla. Gulfstream's objective is to site the facility on a location that minimizes residential and environmental impacts. The company is evaluating one location in an industrial area of northwestern Manatee County -- an 80-acre tract located north of Buckeye Road, east of the Piney Point Phosphate Plant.

Siting Criteria
There are a number of factors that must be taken into consideration when choosing suitable location for a compressor facility. Some of the factors that must be considered include local zoning restrictions and physical constraints such as:

• Proximity to existing pipeline
• Access to electric power
• Pipeline hydraulics
• Compatible with zoning, land use
• Site terrain
• Water table & storm water
• Site accessibility
  

The pipeline company must also evaluate a number of environmental factors, including potential impacts on:

• Residents
• Threatened & endangered species
• Wetlands, water bodies & groundwater
• Fish, vegetation and other wildlife
• Cultural resources
• Geology
• Soils
• Land use
• Air and noise quality
  

Compressor Facilities
Compressor stations, sometimes called pumping stations, are the "engine" that powers aninterstate natural gas pipeline. Most compressor stations are completely automated, so the equipment can be started or stopped from a pipeline's central control room. The control center also can remotely operate shut-off valves along the transmission system. The operators of the system keep detailed operating data on each compressor station, and continuously adjust the mix of engines that are running to maximize efficiency and safety.

Safety Features
The proposed facility will be operated in accordance with all applicable safety standards established by the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration. Some of those safety features include:

• Continuously monitored 24 hours a day / 365 days a year from Gas Control Center.
• Automation system allows compressors to be started, controlled and stopped remotely at any time.
• Automation system protects the facility & surrounding area if equipment is not operating correctly.
• Remotely operated station shut-off valves.
• Extensive emergency systems include sophisticated sensors to detect leaks or fire.

Regulatory Process

The Federal Energy Regulatory Commission (FERC) is charged by Congress with determiningwhether or not proposed interstate pipeline projects are in the public convenience and necessity. The information below explains the FERC's review process for the planned project, and how you can get involved in the process.

FERC Pre-Filing
On April 26, 2006, Gulfstream requested the Federal Energy Regulatory Commission (FERC) initiate an environmental review of Phase IV Expansion Project prior to the company's certificate application. This process, known as pre-filing, is facilitated by the FERC to encourage involvement by citizens, government entities and other interested parties in the very early design stages of a proposed project.

During the pre-filing process, the FERC notifies citizens, government entities and other interested parties of the proposed project and requests comments. Gulfstream hosted public workshops July 11, 12 & 13 to solicit feedback and gather comments related to the project. Approximately 60 interested parties attended the workshops.

FERC Filing
Gulfstream filed a certificate application with the FERC on December 22, 2006. The FERC assigned the project Docket Number CP07-51-000. The FERC approved the project in September 2007. All documents and correspondence submitted to or issued by the FERC regarding the Phase IV Expansion Project can be accessed by referencing the Docket Number on the FERC website located at http://elibrary.ferc.gov/idmws/search/fercgensearch.asp.

Environmental Assessment (EA)
The FERC will prepare an EA using information included in Gulfstream's certificate application, supplemental information that may be provided by Gulfstream upon request, and information assembled by its own staff. The EA will describe the proposed project and alternatives and will identify existing environmental conditions and the potential impacts from the project. The EA will also indicate what mitigation measures, construction procedures, and routing could be included in the project to eliminate or reduce impacts.

Once the EA is issued, stakeholders will have a 30-day period to comment.

Certificate of Public Need and Necessity
In September 2007 the FERC issued an Order granting a Certificate of Public Convenience and Necessity. This is the document FERC issues that signifies the approval has been granted to build and operate the pipeline. Comments received on the EA are typically addressed by FERC in this document. The certificate details the conditions of the approval, including the final route that FERC has authorized, and construction and mitigation measures that Gulfstream must follow.

Comments to FERC
When providing comments to the FERC, you should reference pre-filing Docket No. CP07-51-000. Comments may be filed via the Internet on the FERC's website at http://www.ferc.gov. You may provide written comments to the FERC by sending them to:
Magalie R. Salas, Secretary
Federal Energy Regulatory Commission
888 First St., N.E., Room 1A
Washington, DC 20426