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FERC Grants Extensions for Constitution, Clarington Projects

FERC signaled its support for two stalled projects on Tuesday, granting separate extensions to Constitution Pipeline LLC to complete its embattled natural gas pipeline in New York State and Pennsylvania, and to Dominion Transmission Inc. to finish its Clarington project.

Constitution had asked the Federal Energy Regulatory Commission for a 24-month extension last Friday [CP13-499]. But in a letter Tuesday, FERC gave Constitution additional time -- until and including Dec. 2, 2018 -- to complete construction of the pipeline, which would transport Marcellus Shale gas to markets in the Northeast.

FERC originally approved the project in December 2014 (see Shale DailyDec. 3, 2014), and it was supposed to be completed within a two-year timeframe. Those plans were derailed in May when the New York Department of Environmental Conservation (DEC) refused to issue a Section 401 Water Quality Certification under the federal Clean Water Act (see Shale DailyMay 16).

Constitution's backers subsequently filed an appeal with the U.S. Circuit Court of Appeals for the Second Circuit over the DEC's refusal to issue the permit. Several industry groups -- including the Natural Gas Supply Association, the American Petroleum Institute, the American Gas Association, the Interstate Natural Gas Association of America and the Process Gas Consumers Group -- filed an amicus brief on Constitution's behalf last week (see Shale DailyJuly 20). The appellate case is Constitution Pipeline Co. LLC v. DEC et al [No. 16-1568].

Constitution is owned by subsidiaries of Williams Partners LP, Cabot Oil & Gas Corp., Piedmont Natural Gas Co. Inc. and WGL Holdings Inc. The approximately 124-mile, 30-inch diameter pipeline would transport Marcellus gas produced in northeast Pennsylvania to Schoharie County, NY, where it would connect with two existing interstate pipelines: Iroquois Gas Transmission and Tennessee Gas Pipeline. It would provide 650,000 Dth/d of takeaway capacity.

The saga over the Constitution Pipeline has lasted more than four years. The project had an original in-service date of March 2015, but regulatory delays by the DEC and opposition by some landowners along the pipeline route and environmental groups caused the project to founder. The company won permission to begin clearing activities in Pennsylvania after prevailing in federal court in March 2015 (see Shale DailyMarch 20, 2015).

In March of this year, the in-service date was pushed back to the second half of 2017 in order to comply with directives from FERC and the U.S. Fish and Wildlife Service to protect wildlife along the pipeline's route (see Shale DailyMarch 10).

Meanwhile, FERC also granted Dominion more time to complete its $77 million Clarington project [CP14-496], a series of new compression facilities, interconnections and associated equipment designed to boost capacity on its mainline system by 250,000 Dth/d (see Daily GPIAug. 21, 2015).

The original order gave Dominion one year to complete the project and bring it into service. In its application Dominion said the project would be completed and in service by Nov. 1. But last Friday the company asked FERC for an extension until Dec. 31. The regulatory agency gave Dominion more time -- up to and including Aug. 19, 2017.

Clarington would allow Dominion to provide 250,000 Dth/d of incremental firm transportation service for Consol Energy Inc. The producer, which currently has more than 500,000 net acres in the Marcellus and Utica shales, signed a 15-year binding precedent agreement in 2013 for the capacity.

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