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FERC OKs Mega-Northeast Project to Deliver Gas to New York

In its final meeting of the year Thursday, FERC issued a certificate for the Northeast Project -- also known as the reconfigured Millennium Pipeline project -- that would deliver as much as 300,000 Dth/d of natural gas from Canada and other areas to gas-hungry markets in New York City and the surrounding region.

The Northeast Project, which is estimated to cost $1.04 billion, is an amalgamation of five projects proposed by Millennium, Columbia Gas Transmission Corp., Empire State Pipeline and Empire Pipeline Inc., Algonquin Gas Transmission and Iroquois Gas Transmission System. It would deliver 250,000 Dth/d of gas to the New York City area in its first year of service, increasing to 300,000 Dth/d in its second year. The project is targeted for completion in 2008, according to the Federal Energy Regulatory Commission.

It is an alternative to the 442-mile, 700 MMcf/d Millennium Pipeline project that the Commission approved in September 2002 (see Daily GPI, Sept. 19, 2002). That project never got off the ground because it was blocked from crossing the Hudson River by New York State, which ruled Millennium to be inconsistent with the state's authority under the Coastal Zone Management Act. The project was declared dead in the water when former Commerce Department Secretary Donald Evans upheld New York State's position in a December 2003 ruling (see Daily GPI, Dec. 17, 2003).

FERC expressed hope Thursday that the newly configured project will not be opposed by New York. "I just hope consumers realize there is a cost in delay. Some of these costs came up [to] $40 million a mile...So the longer we delay putting infrastructure in the ground, the more people are going to pay for it," said Commissioner Philip Moeller.

Chairman Joseph Kelliher noted that New York City's gas demand has risen by more than 7% since FERC issued its 2002 Millennium order, and it is expected to increase by more than 15% over the 2002 demand level by 2008, when the Northeast Project is scheduled to go into service.

The Millennium portion of the Northeast Project calls for the construction of 181.7 miles of 30-inch diameter pipeline from Corning, NY, in the southwestern part of the state to Ramapo, NY, in Rockland County, just north of New York City; 15,002 horsepower of compression; and the acquisition of pipeline facilities from Columbia. It would have the capacity to transport 525,000 Dth/d to New York City. Construction costs for the Millennium segment have been pegged at $664 million.

The Columbia project entails the abandonment in place and by removal of nearly 170 miles of Line A-5 pipeline in New York. Millennium would remove Columbia's pipeline when its installs its line in the same location. The project also includes the abandonment by sale of about 65-70 miles of Columbia's Line A-5 pipeline to Millennium. In addition, Columbia proposes to replace 8.8 miles of eight- and 16-inch diameter segments of its Line A-5 pipeline with a larger 30-inch diameter pipeline in Orange and Rockland Counties.

Empire State Pipeline proposes to build a 78-mile, 24-inch diameter connector line to tie in with its 24-inch diameter system, which originates at the United States-Canada border near Buffalo, NY, and extends easterly 157 miles to near Syracuse, NY, to the proposed Millennium Pipeline near Corning. The $144 million Empire Connector Project would transport 250,000 Dth/d and would provide customers with access to supplies at the Dawn Hub through Empire State Pipeline's connection with TransCanada PipeLine system at the Chippawa Channel of the Niagara River.

Algonquin Gas is seeking to build 4.8 miles of pipeline to replace its existing 26-inch diameter mainline with a 42-inch diameter pipeline and associated facilities, along with 71,810 hp of additional compression. The $192 million project, which would have a design capacity of 325,000 Dth/d, would facilitate the transportation of new supply receipts from Millennium at the Ramapo Station to an interconnect with the Iroquois system in Brookfield, CT, and an interconnect with the stalled Connecticut-to-Long Island Islander East Pipeline project.

Iroquois proposes to install 7,700 hp of new compression to transport 100,000 Dth/d of gas from Brookfield to New York City. This portion of the Northeast Project is estimated to cost $42 million.

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