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Millennium Marcellus Expansion Stalled at FERC

Millennium Pipeline Co. LLC and sponsors of its proposed natural gas compressor station project in Minisink, NY, which would boost the company's firm deliveries of Marcellus Shale gas to about 675,000 Dth/d to serve the Northeast and New England markets, continue to await FERC's final decision on the application, originally filed almost a year ago.

Millennium filed its application in July 2011 and asked the Federal Energy Regulatory Commission (FERC) to issue a certificate by January-February [CP11-515]. Southwestern Energy Services Co. (SESC), an anchor shipper, urged FERC to approve the expansion by Feb. 1 so it could be in operation by the start of the winter heating season, Nov. 1 (see NGI, Jan. 9).

Southwestern has contracted for 25,000 Dth of firm capacity on the pipeline, according to Millennium Pipeline's index of customers. KeySpan (200,000 Dth), ConEd of New York (180,000 Dth) and WPX Energy Marketing (140,000 Dth) hold the largest capacity contracts on the pipeline, which has more than 790,000 Dth of firm capacity contracted.

But in December FERC staff requested comments on an alternative compressor station site, the Wagoner/Neversink Alternative, which would involve the construction of a smaller 5,100 hp compressor station at a site adjacent to Millennium's existing Wagoner Meter Station in Sparrowbush, NY, and would require the replacement of pipeline facilities. Staff requested landowner comments by Jan. 23 to assist it with its environmental analysis of the alternative.

On March 2 Commission staff issued a favorable environmental assessment (EA) to Millennium, seemingly bringing the compression project one step closer to receiving a certificate. Comments on the EA were originally due by April 2, but the comment period was extended until April 16; Millennium responded to the comments on May 3.

FERC has not issued a certificate and Millennium's project -- though "ripe for a decision," according to a FERC spokeswoman -- and it was not on the agenda for the Commission's business meeting Thursday.

"Given that the review of this project has extended beyond the anticipated time frame and given a realistic construction schedule, any further delay in receiving the certificate order will jeopardize the availability of the project for the upcoming heating season, as required by the project shippers," Millennium said in a recent filing with FERC. Millennium, SESC and WPX have asked that a certificate order be issued on an expedited basis by Friday (June 22).

Millennium has proposed construction of two 6,130 hp gas-fired compressor units, a 36-inch diameter suction and discharge pipeline and associated facilities in the Town of Minisink in Orange County, NY, to increase firm deliveries to its interconnection with Algonquin Gas Transmission. The project also will permit bidirectional gas flow on Millennium's system between its existing compressor station at Corning, NY, and the proposed Minisink station.

Millennium estimated that the project will cost $43.6 million. It said the project is fully supported by precedent agreements for long-term firm transportation, at negotiated rates, with two anchor shippers and one additional shipper.

The Minisink application is still pending at FERC and a decision could come at any time, according to Tamara Young-Allen, a spokeswoman for FERC. As with all such applications, "the Commission doesn't say when it will make a decision; the order just comes out," Young-Allen told NGI. "It is ripe for a decision, but we don't know when an order is coming out."

The project is not without opposition. Minisink Residents for Environmental Preservation and Safety (MREPS) continues to argue against it, saying the Wagoner alternative "is far superior...and would satisfy both Millennium's goals and the concerns of MREPS and other community residents." In documents filed with FERC, the group has called on the Commission to hold a hearing on differences between Millennium's proposal and the Wagoner alternative.

Pipeline flows into Millennium are dominated by the Marcellus Shale. As of midmorning Tuesday, 79% of daily scheduled receipts into Millennium were to come from the Stagecoach Pipeline, with nearly all of the the rest to flow from the Laser Midstream system. Both systems were put into service to transport Marcellus production.

Nearly two-thirds (64%) of scheduled delivery volumes are pegged for Algonqiun Pipeline at the eastern terminus of Millennium Pipeline at Ramapo, NY, with another 22% of deliveries scheduled to flow into Empire Pipeline in Steuben County, NY.

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