Natural Gas Suppliers Advance on New England

The drive to increase New England’s natural gas capacity has intensified this week with two important announcements regarding pipeline projects that would feed the region.

Spectra Energy this week announced it is partnering with Northeast Utilities on the Access Northeast expansion project, which would expand Spectra’s existing pipeline infrastructure that includes the 1,130-mile Algonquin Gas Transmission and the 890-mile Maritimes and Northeast Pipeline. The project would expand delivery capacity by as much as 1 billion cubic feet per day.

In a separate announcement, pipeline giant Kinder Morgan Energy Partners LP announced it is seeking to begin the application process with the Federal Energy Regulatory Commission (FERC) for its proposed Northeast Energy Direct pipeline, which would deliver natural gas produced in Pennsylvania to Massachusetts. The project would includes 125 miles of new “greenfield” pipeline stretching from the New York-Massachusetts border to Dracut, Mass., near the New Hampshire border. Northeast Energy Direct would deliver up to 2.2 billion cubic feet a day of natural gas.

The announcements suggest that natural gas capacity for the region will expand despite a breakdown in a regional initiative to promote increased natural gas capacity. The governors of the six New England states had proposed to support the development of new pipelines by instituting a tariff that would increase utility electric rates to help underwrite the cost of privately owned and operated pipelines.

The plan to request a tariff from FERC is on hold because it did not receive the necessary approvals from all six New England states. Five states signed off on the plan, but the Massachusetts Legislature balked, questioning whether ratepayer-sponsored natural gas expansion was necessary.

The heating oil industry views natural gas expansion as a grave threat, and several state heating oil associations have actively opposed plans to support natural gas expansion with financial support from ratepayers or taxpayers.

The Spectra and Kinder Morgan projects are not expected to come on line until 2018, but New England’s natural gas supply will improve in the meantime if Spectra completes two other projects already in the works. The Algonquin Incremental Market project would expand the capacity of the Algonquin Gas Transmission by about 0.34 billion cubic feet a day by adding new pipeline and compressor stations. It is expected to come online in November of 2016. Spectra’s Atlantic Bridge project would add up to 0.60 billion cubic feet per day to the Algonquin Gas Transmission (Algonquin) and Maritimes & Northeast Pipeline in November 2017.

Spectra says it will gauge the interest of natural gas providers for its latest expansion by October 31 and then work with ISO-New England and New England States Committee on Electricity (NESCOE) to establish the levels of firm natural gas supply required to ensure supply reliability and allow for growth.

Meanwhile, Kinder Morgan’s Tennessee Gas Pipeline Co. subsidiary is entering the preliminary stages of the FERC review process by using “pre-filing” procedures to identify and resolve environmental issues before formally filing its application. The company has encountered substantial opposition from landowners and environmentalists who object to the pipeline’s proposed siting. The pipeline would not follow an existing right of way but would instead traverse private and public lands. Tennessee Gas Pipeline Co. proposes to complete the project in 2019.

“It will enable New England to sustain its electric grid and lower energy costs to compete on a more level economic playing field with other regions of the nation with access to low-cost gas,” the company wrote in its FERC filing. “As a result of the fact that current natural gas transportation infrastructure is inadequate to meet the growing demand in the New England region, gas prices in New England are the highest in the United States.”

Kinder Morgan announced in July that it had already reached agreements with 10 utilities, also known as local distribution companies or LDCs, to purchase a combined 0.50 billion cubic feet a day of natural gas from the pipeline. The LDCs include The Berkshire Gas Co., Columbia Gas of Massachusetts, Connecticut Natural Gas Corp., Liberty Utilities (EnergyNorth Natural Gas) Corp., National Grid and Southern Connecticut Gas Corp.

Pin It

Comments are closed.