Tennessee Gas Pipeline reduces capacity sought for Northeast Energy Direct project



Last modified: Friday, July 17, 2015

The company proposing a natural gas pipeline that would pass through Plainfield and eight Franklin County towns on its way from Pennsylvania’s shale fields to Dracut has announced that its formal federal application for the project in October will call for 1.3 billion cubic feet per day, requiring a 30-inch pipe through Massachusetts and New Hampshire.

This means that Kinder Morgan’s directors have approved their Tennessee Gas Pipeline Co. subsidiary proceeding with a Northeast Energy Direct project much smaller in ultimate capacity than the 2.2 billion cubic feet per day that has raised concerns among many across the region. However, it still allows Tennessee Gas to return in the future to expand it to the larger capacity if customer demand grows, said spokesman Richard Wheatley

Although he declined to speculate on engineering requirements, Wheatley said it is quite possible a 30-inch pipe would call for smaller compressor stations along the path than the 80,000-horsepower facilities planned for Northfield, as well as Windsor and Hillsborough in New Hampshire. “That may be good news for the people there,” said Wheatley, referring to strong opposition in those towns.

The route of the project, which would enter Franklin County at Ashfield from the Hampshire County town of Plainfield and pass through Conway, Shelburne, Deerfield, Montague, Erving, Northfield and Warwick before continuing into southern New Hampshire, is still being modified. And that may be reflected in a draft environmental report Tennessee Gas plans to file this month with the Federal Energy Regulatory Commission. Wheatley said modifications to the project to reflect its reduced scale may or may not be incorporated in that report.

In the previous report, the company described its project as providing “up to 2.2 billion cubic feet per day of new firm natural gas transportation capacity to meet the growing energy needs in the Northeast U.S., particularly in New England.”

A year ago, in announcing its “anchor” gas distribution companies that had contracted to be part of the project, Tennessee Gas Pipeline described it as having capacity scalable from approximately 0.8 Bcf/d to 1.2 Bcf/d, “or ultimately up to 2.2 Bcf/d, depending on final customer commitments.”

With about 0.55 Bcf/d, the company’s directors agreed to the $3.3 billion investment in the 188-mile market path from Wright, N.Y., to Dracut.

“We are excited that the market path component is moving forward and a determination now has been made on mainline capacity for the project, which is specifically targeted at serving the Northeast and New England’s identified future market needs,” said Kinder Morgan East Region Pipelines President Kimberly S. Watson. “At 30 inches in diameter, a 1.3 Bcf/d pipeline will serve the commitments we have received from New England local gas distribution companies and commitments we expect to receive from other LDCs and electric distribution companies to provide domestic, low cost and environmentally cleaner natural gas as a fuel for New England’s residential and industrial consumers, and to meet New England’s existing and anticipated gas-fired electricity generation demand.”

Thursday’s announcement was “a bit of a demarcation,” said Wheatley, adding that plans for the project had been for some combination of 36- and 30-inch pipe segments, and that the decision reflected feedback from “outreach we’ve conducted and dialogue with customers.”

He said the company expects to find additional demand from customers, and that if the project ultimately needs to be scaled up to 2.2 Bcf/d, that would entail replacing some of the pipe with 36-inch pipe, looping some pipe segments to add capacity or additional compression capacity to speed the flow of gas.

But Wheatley said he could not speculate on what approvals would be needed to expand that capacity.

Critics of the pipeline proposal, now in a phase of determining the scope of what will be studied in an upcoming environmental impact statement by the federal commission, have questioned the need for the volume of gas the Northeast Energy Direct project would provide, when several other pipelines have been proposed by other companies, along with other ways of adding natural gas capacity at peak times.

But Wheatley refused to speculate on whether a scaled-down project stands a better chance of being approved by the federal commission.

“We look at the optimum size based on our scoping and design and the possibilities for expansion,” he said. “We ‘re comfortable going forward with the projects and the commitments we have now.”

But while Wheatley said he is confident that there will be additional customer demand for the pipeline, the project’s critics have pointed out repeatedly that demand has lagged, resulting in the company’s cancellation of a planned Worcester lateral last month.

Kathryn Eiseman, director of Massachusetts Pipeline Awareness Network, said, “Kinder Morgan still has the same amount of capacity subscribed for this pipeline as it did a full two years ago — about 500,000 dekatherms per day. More than a quarter of this amount is just replacing capacity contracts on existing pipelines.’

Against a sour quarter for Kinder Morgan — earnings were below analyst estimates and year-over-year revenues were down 12 percent, according to the website Investor Place — Eiseman added, “Given that the company’s stock price has been falling and they had to announce yesterday that earnings failed to meet predictions, I can imagine that they moved NED into the (project) backlog in part to prop up the overall perception of the company’s prospects.”




 


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