Marcellus / Utica / Northeast / Shale Daily

Rover’s Phase 1 to See Partial Delay, Energy Transfer Says

While part of Energy Transfer Partners LP's Rover Pipeline Phase 1 remains on track for an early July start-up, the rest of Phase 1 is likely to get pushed back, a company spokeswoman said Thursday.

"We continue to be on schedule to bring on a portion of Phase 1 in early July," Energy Transfer's Alexis Daniel told NGIvia email. "We remain optimistic that the remaining portion of Phase 1 will be online within 60 days, by late July. We do not anticipate any delays to the in-service date on Phase 2, which is Nov. 1, 2017.

"We continue to work with the FERC and the Ohio [Environmental Protection Agency] and hope to resolve all outstanding issues soon.”

Daniel's comments come after the Federal Energy Regulatory Commission on Thursday denied Energy Transfer's request to complete horizontal directional drilling (HDD) at two sites critical to planned supply laterals -- crossings at Captina Creek in Belmont County, OH, and at Middle Island Creek in Tyler County, WV.

The Captina Creek crossing, in particular, is necessary to complete the Clarington Lateral and if left unfinished would impact Phase 1 by cutting off supplies from a number of receipt points further south on the line, according to analysis by natural gas analytics firm Genscape.

Earlier this month, FERC ordered Energy Transfer to halt all new HDD activities for Rover pending an independent review of the company's handling of a 2 million gallon spill of drilling fluids into a wetland near the Tuscarawas River in Stark County, OH.

Energy Transfer asked to finish the Captina and Middle Island HDDs, saying work had already begun at the two sites, but FERC -- which previously scolded the company over its demolition of a historic home in Ohio -- didn't budge.

While other construction activities can continue, the stoppage on new HDD work -- including at the Captina and Middle Island creek crossings -- marks a definite setback for a project that was already running on a tight schedule.

The 3.25 Bcf/d, 710-mile Rover project figures to reshape the natural gas supply landscape once in service, as it will open up a path for significant volumes of Marcellus and Utica shale gas to reach the Midwest, Gulf Coast and Canada. Phase 1 will connect to the Midwest Hub in Defiance, OH, with Phase 2 interconnecting with the Vector Pipeline in Michigan.

Given Rover's scope, news of FERC's order to halt HDD work on the project roiled futures markets on speculation of a delay. However, analysissuggests that producers may grow into the new capacity rather than fill it immediately as with previous Appalachian expansions.

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