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Energy Transfer Again Pleas For Restart of Rover Pipeline Drilling

In a letter to FERC on Friday, Energy Transfer Partners LP (ETP) provided more details about how it plans to mitigate environmental impacts at construction sites along the Rover Pipeline route in Ohio, again requesting that commissioners authorize horizontal directional drilling (HDD) to resume after it was suspended in May.

The Federal Energy Regulatory Commission (FERC) ordered the company to stop all new HDD work, pending a third-party review of drilling fluids spills, which included a two million gallon release near the Tuscarawas River in Stark County, OH. FERC has chosen Tulsa, OK-based J.D. Hair & Associates to conduct an analysis of Rover's response to the spill, what could have been done to minimize it and determine if the company acted in accordance with its HDD contingency plan.

ETP said Friday that Seattle-based GeoEngineers Inc. has also been contracted to review the drilling plans for remaining HDDs along the project to verify the current design or recommend modifications that would improve the drilling process. GeoEngineers would provide supervision during drilling operations and Rover plans to add more personnel and aerial drones to monitor for releases in an expanded "inspection radius," among other things, to reduce the likelihood of another spill.

The commission late last month denied Rover's request to resume operations at two HDD sites critical to laterals in Ohio and West Virginia. FERC denied requests for those sites at Captina Creek in Belmont County -- needed to complete the Clarington Lateral -- and at Middle Island Creek in Tyler County, WV, which is necessary to finishing the Sherwood lateral.

Those sites are critical to Rover's July 1 partial in-service date. Without them, the system couldn't pull gas from supply headers or the Clarington Hub.

Rover submitted the Middle Island Creek and Captina Creek technical analysis reports last month. GeoEngineers concluded that the currently proposed drilling plans are acceptable. More technical analysis reports for other HDD sites were submitted by ETP on Friday along with the letter to Terry Turpin, director of FERC's Office of Energy Projects, which has launched an investigation of the spill.

"For the reasons discussed herein, Rover respectfully requests that FERC allow Rover to continue HDD operations at the locations for which reports are included herein, as well as the Captina Creek and Middle Island Creek locations," ETP Executive Vice President of Engineering Joey Mahmoud wrote in the letter. "Meeting Rover's project schedule is critical to the producers in the region and the many customers across the United States that are making plans and are relying on gas deliveries."

Mahmoud added that "all indications are that FERC and J.D. Hair are proceeding expeditiously with its review and analysis of the Tuscarawas River HDD and inadvertent release."

The 710-mile, 3.25 Bcf/d Rover Pipeline is designed to connect Marcellus and Utica shale natural gas to markets in the Midwest and Gulf Coast. It’s scheduled to come online in two phases this year. Phase one to the Midwest Hub in Defiance, OH, is scheduled for July, while phase two, connecting the Vector Pipeline in Michigan and the Dawn Hub in Ontario, is scheduled for November.

ETP has said that a portion of phase one remains on schedule and would come online in early July, with the remaining portion of the first phase set to come online shortly after that . Phase 2 remains on track for a Nov. 1 in-service date.

The market has raised concerns about the project's aggressive schedule and the FERC suspension, with some analysts suggesting the timeline won't be met. The company continues to barrel forward, however.

"Based on our analysis, we still conclude that Rover phase one is likely to be online sometime in July or early August," analysts at East Daley Capital said on Thursday. "The full in-service date of November 2017 appears to also be on track. These timelines assume no additional regulatory work stoppages by FERC or the state of Ohio."

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