PennEast Pipeline Company, LLC, announced today the successful close of its binding open season for a proposed interstate natural gas pipeline designed to transport approximately 1 billion cubic feet per day to the northeast markets – or enough natural gas to heat more than 4.7 million homes.
PennEast is a joint project of AGL Resources; NJR Pipeline Company, a subsidiary of New Jersey Resources; South Jersey Industries; and UGI Energy Services (UGIES), a subsidiary of UGI Corporation. The open season resulted in 965,000 dekatherms per day of binding bids, which include the 485,000 dekatherms per day committed by the PennEast project sponsors and their affiliates. PennEast continues to receive interest from additional shippers and expects to finalize all agreements this month.
“This successful open season demonstrates the demand for natural gas and the need for safe, reliable transportation infrastructure to address delivery constraints,” said Peter Terranova, chairman of the PennEast Pipeline Board of Managers. “The PennEast Pipeline is a critical step to bringing low-cost Marcellus Shale gas to Pennsylvania and New Jersey utility customers and other mid-Atlantic downstream markets.”
The proposed 100-mile PennEast Pipeline would begin in Luzerne County in northeastern Pennsylvania and end at Transco’s Trenton-Woodbury interconnection in New Jersey. An existing power generation facility and several delivery points in Pennsylvania and New Jersey are being considered along the proposed route.
“This project demonstrates willingness by utilities and other downstream entities, including electric generators, to contract for direct access to prolific Marcellus Shale gas,” said Terranova. “The combination of the number of Foundation Shippers, the number of delivery points and diversity of supply makes the PennEast Pipeline a very attractive project, especially compared to other proposed projects in this region.”
PennEast is investing nearly $1 billion to build the pipeline, with costs split equally among the four entities. UGIES is the project manager for the development of the project and will operate the pipeline.
PennEast will continue with public outreach and begin preliminary engineering studies in the coming months, along with filing a formal application with the Federal Energy Regulatory Commission (FERC). Pending approvals, pipeline construction could begin in 2017 with an in-service date in late 2017.
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