Four U.S. companies form JV to build Atlantic Coast Pipeline

Pipeline coming from oil pump
Source: DollarPhotoClub

Four major U.S. energy companies – Dominion, Duke Energy, Piedmont Natural Gas and AGL Resources – announced today the formation of a joint venture to build and own the proposed Atlantic Coast Pipeline. The $4.5 billion to $5 billion, 550-mile natural gas pipeline would run from Harrison County, W. Va., southeast through Virginia with an extension to Chesapeake, Va., and then south through central North Carolina to Robeson County.

The partnership, called Atlantic Coast Pipeline LLC, will own the pipeline initially proposed by Dominion as the Southeast Reliability Project. It is designed in part to meet the needs identified in requests for proposals last April by Duke Energy and Piedmont, and in June by Virginia Power Services Energy. It would deliver natural gas supplies to growing markets for additional customers in Virginia and North Carolina. The pipeline would provide a new route for direct access to the burgeoning production in the Marcellus and Utica shale basins of West Virginia, Pennsylvania and Ohio.

The chief executives of the four sponsoring companies – Thomas F. Farrell II of Dominion, Lynn J. Good of Duke Energy, Thomas E. Skains of Piedmont Natural Gas and John W. Somerhalder II of AGL Resources – issued the following joint statement:

“The Atlantic Coast Pipeline is a transformational project for our region. It will create thousands of construction jobs during development and significant new revenue for state and local governments throughout North Carolina, Virginia and West Virginia. The expanded source of gas will also help fuel economic development across the region as businesses and homes rely more on natural gas.

“Natural gas is increasingly important for advanced electricity generation, contributing to significantly lower greenhouse gas and other emissions. The project will also provide more reliable access to new sources of natural gas, keeping consumers’ energy costs down – even during the coldest and hottest weather.”

Dominion is to build and operate the Atlantic Coast Pipeline on behalf of the venture. With more than 100 years of service, Dominion is one of the nation’s most-experienced operators of natural gas pipelines. It operates nearly 8,000 miles of interstate pipeline in six states as well as one of the nation’s largest natural gas storage systems.

The joint venture ownership stakes are: Dominion, 45 percent; Duke Energy, 40 percent; Piedmont, 10 percent; and AGL Resources, 5 percent. Subsidiaries and affiliates of all four joint venture partners plan to be customers of the pipeline under 20-year contracts, pending regulatory approvals. PSNC Energy also plans to be a customer of the pipeline under a 20-year contract, pending regulatory approvals.

Dominion has begun surveying to determine the best route, one that meets operational and reliability needs while minimizing the impact on the environment as well as historical and cultural resources. The company plans to make a pre-filing request with the Federal Energy Regulatory Commission (FERC) this autumn on behalf of Atlantic Coast Pipeline. It expects to file its FERC application in the summer of 2015, receive the FERC Certificate of Public Convenience and Necessity in the summer of 2016, and begin construction shortly thereafter.

The extensive FERC review process solicits input from numerous local, state and federal entities, and private citizens. Public safety, air quality, water resources, geology, soils, wildlife and vegetation, threatened and endangered species, land and visual resources, cultural and historic resources, noise, cumulative impacts and reasonable alternatives are fully examined.

The main pipeline would have a 42-inch diameter in West Virginia and Virginia, reducing to 36 inches in diameter in North Carolina.

In announcing their request for proposals, Duke Energy noted increasing reliance on natural gas to generate electricity, and Piedmont cited growing customer demand. Currently, North Carolina is served primarily by a single major wholesale interstate natural gas pipeline that runs through the western portion of the state.

Virginia has limited access to supplies from the Marcellus and Utica shales and has a need for increased infrastructure to support growing demand for natural gas-fired generation, and to add supply diversity for reliability and price stability.

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