Shale Daily / Gulf Coast / Mid-Continent

NextEra Pulls Plug on Sooner Trails but Three NatGas Pipes Still 'On Track'

NextEra Energy Inc. said three natural gas pipelines under development by a subsidiary are on track, but FERC records show the company's plans for a fourth pipeline that would serve shale plays in the Midcontinent region have been withdrawn.

In a statement last Friday, Juno Beach, FL-based NextEra said two of the three pipelines, Sabal Trail Transmission and Florida Southeast Connection pipelines that under development by subsidiary NextEra Energy Resources LLC, "remain on track" and that construction "is progressing well, with operations expected to begin in the second quarter of this year."

The proposed third project, Mountain Valley Pipeline (MVP), "continues to progress through the permitting process with the Federal Energy Regulatory Commission, with commercial operations expected to commence by year-end 2018."

During an earnings conference call Friday to discuss 1Q2017, CFO John Ketchum said NextEra was continuing "to make good progress on development and construction activities related to our three natural gas pipeline projects, and our development team continues to seek new pipeline opportunities going forward."

But management made no mention about its decision to withdraw the proposed Sooner Trails Pipeline from FERC's pre-fling process [PF15-30]. Instead, an attorney for Sooner Trails Pipeline LLC filed a short notice with the Commission last Friday.

Sooner Trails was a joint venture (JV) formed in August 2015 between Southern Star Central Corp. and NextEra subsidiary, NextEra US Gas Assets LLC. The proposed 250-mile pipeline was designed to serve expanding gas development in Oklahoma’s SCOOP (the South Central Oklahoma Oil Province) and STACK (the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties). The pipeline would have provided up to 1.2 million Dth/d of capacity, connecting receipt points in multiple Oklahoma counties with interstate and intrastate natural gas pipeline markets in Bryan County, OK, and Lamar County, TX.

Sooner Trail's demise would be a boon to a competing project, Cheniere Energy Inc.'s proposed Midship Pipeline system, which includes a 200-mile, 36-inch diameter mainline that would provide up to 1.4 million Dth/d of firm capacity. Midship would connect the SCOOP and STACK plays to Gulf Coast and Southeast markets. Midship Pipeline Co. LLC launched a binding open season in March.

The Sabal Trail pipeline, a project of NextEra and Spectra Energy Corp., includes about 515 miles of pipeline, six compressor stations and six meter stations in Alabama, Georgia and Florida [CP15-17]. It is designed to provide up to 1.07 million Dth/d of firm service. Enbridge Inc. acquired Spectra earlier this year.

Meanwhile, the Florida Southeast Connection pipeline project would deliver gas to NextEra subsidiary Florida Power & Light Co.'s (FPL) Martin Clean Energy Center near Indiantown, FL [CP14-554].

MVP is a proposed 301-mile, 42-inch diameter gas pipeline project with 2 million Dth/d of takeaway capacity [CP16-10]. The pipeline, which would supply gas from the Marcellus and Utica shales to markets in the Southeast, would run from Wetzel County, WV, to an interconnection with the Transcontinental Gas Pipe Line in Pittsylvania County, VA. MVP is a JV of NextEra US Gas Assets LLC, EQT Midstream Partners LP, Con Edison Transmission Inc., WGL Midstream and RGC Midstream LLC.

According to Ketchum, NextEra's investment in the Sabal Trail is expected to be about $1.5 billion, with another $550 million invested in Florida Southeast Connection. He said an additional $1 billion is being invested in MVP.

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