First pipeline to bring Marcellus gas to New York and New England gets FERC approval

Pipes and valves in a gas compressor station
Source: DollarPhotoClub

A new $700 million pipeline bringing Marcellus shale gas to heavily populated areas in New York and New England has got the approval of the Federal Energy Regulatory Commission.

The Constitution project is a 124-mile pipeline that aims to loosen a bottleneck of gas in Appalachia while easing the domestic energy prices in New York and New England. The increase in production from shale wells and the lack of infrastructure to bring that gas to consumers, pushed the prices of Marcellus gas at the well to about half of the national benchmark. Meanwhile, during the last year’s cold spell, household energy bills in New York and New England rose 20-fold.

The 30-inch pipeline is among dozen or so projects designed to connect shale gas producers with energy consumers. The Constitution pipeline will deliver 650 million cubic feet of gas from Pennsylvania’s Susquehanna County through New York’s Broome, Chenango, and Delaware counties to the existing Tennessee and Iroquois pipelines in the Schoharie County town of Wright, 80 miles southwest of Albany, New York.

The project is a cooperation of several companies, the lead partners being: Tulsa-based Williams Partners LP and Houston-based Cabot Oil & Gas Corp. Williams will operate the pipeline, while Cabot and Southwestern Energy have long-term agreements to supply the gas. Other partners include Piedmont Natural Gas Company Inc. and WGL Holdings Inc.

Marcellus shale is a massive shale formation underlying several states – northern and western Pennsylvania, eastern Ohio, through western Maryland, and throughout most of West Virginia – and extending northwards towards Canada, where it stretches between Port Stanley and Long Point to St. Thomas in southern Ontario. In 2009, the U.S. Department of Energy’s National Energy Technology Laboratory estimated that the Marcellus shale’s original gas-in-place might be as much 1,500 TCF.

Price-wise, Marcellus Shale gas is about half the cost of the Gulf of Mexico gas that traditionally reached Boston and New York City through existing pipelines. It also is cheaper than Canadian gas that flows to the Northeast.

The Constitution project, which still awaits Army Corps of Engineers permits, is expected to be completed in late 2015 or early 2016.

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