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Energy Transfer Says Rover Start-Up Slipping to 'Late Summer,’ Citing Regulatory Snags

The initial start-up for Energy Transfer Partners LP's (ETP) Rover Pipeline could be pushed back to "late summer" due to recent regulatory setbacks, the company said Monday.

ETP/Rover spokeswoman Alexis Daniel told NGI’sShale Daily that "as a result of our continued efforts to work with" the Federal Energy Regulatory Commission and the Ohio Environmental Protection Agency (Ohio EPA), "we are anticipating that the Phase 1 section has the potential for an in-service date of late summer of 2017. At this time we do not anticipate any delays to the November 2017 in-service date on Phase 2."

Daniel was responding to a question about last week's letter from FERC Office of Energy Projects Director Terry Turpin, which outlined several clean-up and mitigation activities ETP/Rover would have to complete before receiving in-service authorization.

The requirements follow a roughly 2 million gallon drilling fluids spill that occurred during Rover construction near the Tuscarawas River in Stark County, OH. Citing the scope of the spill, FERC issued a moratorium on new horizontal directional drilling (HDD) for the project pending an independent review.

A 3.25 Bcf/d, 710-mile greenfield project aimed at transporting Marcellus and Utica shale gas to markets in the Midwest, Gulf Coast and Canada, Rover could uncork large volumes of Appalachian production and reshape the natural gas supply landscape once in service. The project is scheduled to come online in two phases this year.

Phase 1, including supply gathering in the western Appalachian Basin and a mainline connection to the Midwest Hub in Defiance, OH, was originally scheduled to come online this month.

Those plans were revised after FERC ordered the HDD moratorium, which prevents crews from completing a key Phase 1 lateral in eastern Ohio, analysts have noted.

ETP/Rover had still hoped to place a portion of Phase 1 from Cadiz, OH, to Defiance into service this month. Daniel did not specify Monday whether the “late summer” timeframe applied to all of Phase 1 or just the part impacted by the HDD moratorium, but FERC's stated plan to withhold in-service authorization pending additional clean-up efforts seems to have prompted the latest revision to the schedule.

Phase 2 would see Rover extend service to an interconnect with the Vector Pipeline in Michigan, which will also allow shippers to reach the Dawn Hub in Ontario.

Since receiving its FERC certificate in February, ETP/Rover has moved forward at an aggressive pace, hustling to have the full project ready to go in time for Winter 2017/2018.

But despite making quick progress, the project has accumulated run-ins with regulators along the way, including Ohio EPA, which cited the pipeline for numerous environmental violations and is pursuing hundreds of thousands in civil penalties.

Meanwhile, FERC's Office of Enforcement alleged last week that preliminary results of an investigation show ETP/Rover violated the terms of the project certificate by demolishing a historic home near a proposed compressor station without notifying the Commission beforehand.

FERC is also investigating the Tuscarawas River HDD spill after test results indicated the presence of diesel fuel in the drilling mud.

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