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Wasting no time after a deal was announced to acquire an 84-mile pipeline in southeast Pennsylvania from Talen Energy Corp. for $189 million, a subsidiary of New Jersey Resources Corp. (NJR) has launched a binding open season seeking customers for up to 250,000 Dth/d of proposed natural gas service in the region.
The pipeline originates in Northampton County and runs south to the borough of Marcus Hook in Delaware County. It has interconnections with the Texas Eastern Transmission and Columbia Gas Transmission systems.
Adelphia Gateway LLC wants to repurpose the pipeline’s southern 50-mile portion to deliver natural gas to the Greater Philadelphia area. Under the sale agreement, the remaining 34-mile northern portion would be contracted by Talen subsidiaries to supply the independent power producer’s Martins Creek and Lower Mount Bethel generating stations.
The pipeline was built decades ago to deliver oil from a refinery in Marcus Hook to power plants in the region. Its northern segment was converted to deliver natural gas in 1996.
Talen said the deal to sell the pipeline is expected to close in a year, after FERC and the Pennsylvania Public Utility Commission sign-off on the agreement. The final size and capacity of the pipeline, NJR said, would depend on the bids it receives during the open season, which is scheduled to close at 5 p.m. CST on Nov. 20. For more information, contact David Johnson or Jack Herbert at 848-206-8300 or email email@example.com.
Adelphia hopes to place the project into service late next year. Although unrelated, the project would also likely complement efforts underway in Philadelphia to boost the region’s consumption of natural gas in order to attract more energy companies and energy-intensive manufacturing to the city and surrounding areas.
For Talen, the sale caps a process to sell noncore assets that began after it was acquired last year by the energy- and power-focused private investment firm Riverstone Holdings LLC. Talen has indicated that it wants to focus more sharply on its core business of generating electricity.
Earlier this year, the Federal Energy Regulatory Commission waived capacity release regulations and related tariff provisions to help facilitate the sale of Talen Energy Marketing LLC’s retail and wholesale natural gas trading business to another NJR affiliate.
NJR subsidiaries provide natural gas transportation, distribution and asset management services. The company’s principal subsidiary, New Jersey Natural Gas, serves more than half a million customers in New Jersey.