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FERC OKs Dominion Appalachian Pipeline to Carry Marcellus Gas

The Federal Energy Regulatory Commission Thursday approved Dominion Transmission Inc. (DTI) proposal to build its Appalachian Gateway pipeline, which would carry shale and conventional gas production from West Virginia and southwestern Pennsylvania to growing markets in the Mid-Atlantic and Northeast regions.

The certificate order gives DTI, a subsidiary of Richmond, VA-based-Dominion Resources, the authorization to construct 109 miles of pipeline, install four compressor stations and upgrade existing compressor stations in West Virginia and Pennsylvania (see Daily GPI, Sept. 29, 2009). The project would enable DTI to transport 484,260 Dth/d from supply areas in the two states to an interconnection with Texas Eastern Transmission at Oakford in Delmont, PA [CP10-448].

Plans call for the construction of the facilities to begin this year, with service targeted to begin by September 2012, according to DTI.

DTI estimates the cost of the project will be $633.7 million, and the cost of integrating existing facilities -- Dominion's 2008 TL-263 expansion project -- will be an additional $13.3 million. The expansion is a 55-mile, 12-inch diameter pipeline to allow for the receipt of 21,250 Dth/d of incremental Appalachian gas supplies into DTI's system in southern West Virginia.

DTI said it has made 22 precedent agreements with supply aggregators in the Appalachian region for the full 484,260 Dth/d design capacity of the project. The largest prospective customer, which has reserved slightly more than half of the capacity, will be affiliate Dominion Field Services. Each of the agreements is for firm service at negotiated rates for a primary term of 10 years.

FERC rejected protests filed by several coal companies -- Kanawha Eagle Coal LLC, Penn Virginia Operating Co. LLC jointly with Loadout LLC, and WWMV LLC -- that hold rights to coal reserves along the project's proposed route. They advocated an alternative route that they said would allow for greater access to coal reserves and avoid disrupting ongoing mining restoration efforts.

"Because no specific objections are presented, we can only make the general observation that those activities of Dominion that might conflict with restoration efforts should be temporary; thus, we expect the parties to be able to reach accommodations to permit both construction and restoration to proceed either in turn or in tandem," the FERC order said.

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