Marcellus / Shale Daily / Utica / Northeast / NGI All News Access

DTI Files to Separate Gathering/Processing From FERC-Regulated Transmission

Dominion Transmission Inc. (DTI) has filed with FERC for authorization to abandon all of its natural gas gathering and processing facilities in Pennsylvania and West Virginia so they can be spun-off into a newly created, non-jurisdictional affiliate company.

In addition to its primary role as an interstate gas transportation and storage service provider, the company owns and maintains more than 3,000 miles of wet and dry gas gathering pipeline, associated infrastructure and four processing facilities. In a filing last week with the Federal Energy Regulatory Commission (FERC), DTI said it wants to sell those facilities for nearly $434 million to Dominion Gathering & Processing Inc. (DGP) by April 2016. The company filed for a FERC order authorizing the sale by March 2016.

In its application, DTI said the area being served by its gathering system and processing facilities "has undergone a transformation in recent years," noting that the Utica and Marcellus shales recently surpassed 20.4 Bcf/d of production. Much of its regional infrastructure, DTI said, was constructed decades ago by predecessor companies when industry practices and federal energy laws were far different than today.

"Developments in the Appalachian production region have resulted in corresponding changes in the midstream," the company said of gathering and processing in its filing. "The growing need for these services is increasingly provided by non-jurisdictional entities, not the interstate pipeline companies like DTI that historically built the original gathering infrastructure."

DTI said its gathering and processing assets would be better served by a separate midstream company devoted to them, noting that producers have set up master limited partnerships to do so and acknowledging the bevy of regional midstream companies that have formed to serve the nation's growing shale production.

Under its plan, DTI, which currently maintains nearly 8,000 miles of pipeline in six states and a network of storage, would drop down 2,150 miles of wet gas gathering lines in West Virginia; 735 miles of dry gas gathering lines there, and 350 miles of dry gas gathering lines in north-central Pennsylvania. Along with those, it would sell more than 20 compressor stations and four processing facilities, including its Hastings, Copley Run, West Union and Lightburn plants in West Virginia. If approved, DGP would own, operate and maintain those assets, DTI said.  

ISSN © 2577-9877 | ISSN © 2158-8023

Recent Articles by Jamison Cocklin

Comments powered by Disqus