Wednesday, April 12, 2017

Shale Law in the Spotlight: Recent Pipeline Developments in Pennsylvania and the Eastern United States (Part 3)

Written by Chloe Marie – Research Fellow

Last week, our Shale Law in the Spotlight article addressed legal development relating to the Constitution pipeline, the PennEast pipeline, the Rover pipeline, and the Northern Access pipeline. Another article posted two weeks ago discussed the legal development relating to the Atlantic Sunrise pipeline, the Northeast Supply Enhancement, and the Marine East pipeline. This third and last article will address the recent pipeline developments and expansion in Pennsylvania by providing an overview on the development of the Equitrans Expansion project, the Delaware River Pipeline Restoration Relocation project, the Greater Philadelphia Expansion project, the Orion Pipeline project, and the Triad Expansion project.

The Equitrans Expansion Project is part of a two project proposal, including the Mountain Valley Pipeline project, to transport about 600,000 dekatherms per day of central Appalachian natural gas to Northeastern, Mid-Atlantic and Southeastern U.S. markets. Equitrans, LP, plans to construct and operate 7.87 miles of new pipeline consisting of 2.99 miles of new pipeline in Greene County, PA, extending from the new Redhook Compression station to existing interconnects, including Texas Eastern Transmission, LP, and Dominion Transmission, Inc., and to a future interconnect in Wetzel County, WV, and of 4.26 miles of new pipeline running in Allegheny and Washington Counties, PA, from the Applegate Gathering System to existing facilities in the southern U.S.

In April 2015, Equitrans, LP, filed a request to initiate the pre-filing review process and in October 2015, filed a Certificate Application with FERC. On September 16, 2016, FERC released a Draft Environmental Impact Statement (DEIS) stating that the environmental impacts would be reduced to a minimum. FERC was expected to issue a Final EIS in early March 2017, however, on April 6, 2017; FERC issued a Notice of Revised Schedule for Environmental Review of the Mountain Valley Project and the Equitrans Expansion Project. FERC declared that it “only recently received information necessary . . . to complete our environmental review;” thus a Final EIS should be finalized by June 23, 2017.

The Delaware River Pipeline Relocation project involves abandoning 2.4 miles of natural gas pipeline running under the Delaware River and replacing it with 2.6 miles of larger diameter pipeline to connect the Paulsboro Refinery in Paulsboro, Gloucester Country, NJ, to the existing Spectra transmission line in Tinicum Township, Delaware County, PA. This project is operated by Paulsboro Natural Pipeline Gas Company, LLC, (PNGPC) and would increase natural gas transportation capacity from 38 million cubic feet per day to 57.7 million cubic feet per day. The project purpose is to “facilitate the United States Army Corps of Engineers’ dredging activities for the Delaware River Main Channel Deepening Project.”

PNGPC filed an application with FERC in December 2015 to obtain a Certificate of Public Convenience and Necessity for the Delaware River Pipeline Relocation project. In May 2016, FERC issued a Notice of Schedule for Environmental Review of the Proposed Delaware River Pipeline Relocation Project and on September 7, 2016, issued an order granting authorization to abandon and replace a portion of the existing pipeline from the Delaware River. Paulsboro, however, is still waiting to obtain certain environmental permits. Interestingly, in a letter dated December 9, 2016, the Delaware Riverkeeper Network (DRN) expressed concerns that the proposed project “does not comply with Chapter 105 of the Pennsylvania Code and is not consistent with 401 Water Quality Certification requirements in the Clean Water Act due to adverse impacts to waters and wetlands, adverse and unmitigated impacts on protected uses and the maintenance and propagation of indigenous fish and habitat.”

The Greater Philadelphia Expansion project would extend the existing Philadelphia Lateral, a section of the dual Texas Eastern Pipelines, from the Eagle Compressor Station along the dual Texas Eastern pipelines to the Chester Junction Station. From the Junction Station point, the Philadelphia Lateral would divide into two separate pipelines, respectively terminating near the Delaware-Pennsylvania border and near the City of Philadelphia. The Texas Eastern Pipeline System carries approximately 550,000 dekatherms per day of natural gas and the proposed expansion project would increase production capacity up to 475,000 dekatherms per day. According to Enbridge Inc., this project “will help establish the [Greater Philadelphia] region as an energy hub, which has become a key priority of the Philadelphia Chamber of Commerce to attract and grow business and fuel economic development in the region.”

In May 2015, Spectra Energy – now Enbridge, Inc., following its merger with Spectra Energy Corp. in February 2017 – completed the open season, which started from March 25, 2015, to May 8, 2015. According to the energy company, “the response from the market was both positive and favorable, in line with expectations.” No certificate application has been submitted yet to the FERC, however, Enbridge, Inc., expects an in-service date in 2019.

The Orion pipeline project is an expansion project operated by the Tennessee Gas Pipeline, LLC, a subsidiary of Kinder Morgan, Inc., involving the installation of 13 miles of pipeline looping located in Pike and Wayne Counties, Pennsylvania. The proposed pipeline would connect with the 300 Line existing pipeline and would deliver up to 135,000 dekatherms of Marcellus natural gas per day to markets in the Mid-Atlantic and New England states.

In October 2015, the Tennessee Gas Pipeline Company filed a Certificate Application with FERC and FERC approved the construction and operation of the Orion pipeline project on February 2, 2017. As of April 5, 2017, all federal authorizations have been obtained and on March 29, 2017, the contractor started to mobilize the resources needed to construct and operate the site. The Company planned an in-service date in June 2018.

As for the Triad Expansion project, it is another expansion project operated by the Tennessee Gas Pipeline Company, LLC, which intends to build 7 miles of pipeline looping along Tennessee’s existing line right-of-way in Lenox and Clifford Townships, Susquehanna County, Pennsylvania. The project expects to increase natural gas delivery capacity by approximately 180,000 dekatherms per day.

In June 2015, the Tennessee Gas Pipeline Company filed an application with FERC to obtain a Certificate of Public Convenience and Necessity, and on December 30, 2016, FERC issued an Order granting approval to construct and operate the Triad Expansion Project. As of March 29, 2017, the company received all federal authorizations required for the project and construction is expected to start in June 2017 with an in-service date of November 1, 2017.

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