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FERC Staff Gives Final Environmental Thumbs Up to Constitution Pipeline, Wright Interconnect

Any environmental impacts of the proposed Constitution Pipeline and Wright Interconnect projects could be reduced "to less than significant levels" with the implementation of 43 mitigation measures, according to a final environmental impact statement (FEIS) issued Friday by FERC staff.

The pipeline projects [CP13-499-000, CP13-502-000] are designed to carry natural gas from the Marcellus Shale to markets in the Northeast (see Shale Daily,Feb. 13). The Constitution Pipeline would be a 124.4-mile, 30-inch diameter gas line originating in Susquehanna County, PA, and terminating in Schoharie County, NY, where it would interconnect with the Iroquois and Tennessee Gas Pipeline (TGP) systems (see Shale DailyJune 17, 2013).

Constitution also includes two new metering and regulating (M&R) stations, two tie-ins and 11 mainline valves. A pig launcher and a pig receiver would be installed at the M&R stations. Iroquois Gas Transmission has proposed building and operating compressor facilities adjacent to its existing Wright compressor station.

Both projects would deliver up to 650,000 Dth/d to the Iroquois and TGP systems for eventual delivery to markets in New York and New England.

Federal Energy Regulatory Commission staff "concludes that approval of the projects would have some adverse environmental impacts; however, these impacts would be reduced to less than significant levels with the implementation of Constitution's and Iroquois' proposed mitigation and the additional measures recommended by staff in the final EIS," according to the FEIS. The mitigation efforts were first detailed in a draft environmental impact statement (DEIS) issued by FERC eight months ago.

FERC Commissioners will take into consideration staff's recommendations when they make a decision on the projects.

Constitution and Iroquois originally proposed to begin construction in 2Q2014 and 3Q2014, respectively, but with those dates already past, they "would seek approval to begin construction of their projects as soon as possible upon receiving all necessary federal authorizations," according to the FEIS. Constitution has proposed construction to begin in February and continue through the end of 2015, and "we expect an in-service request would follow shortly after the end of construction," FERC staff said.

Constitution and Iroquois simultaneously filed their applications with FERC last year, after the two companies reached an agreement for Iroquois to expand the Wright compressor station, thereby eliminating the need for Constitution to build a compressor station in Schoharie (see Shale DailyJan. 22, 2013).

Iroquois and TGP have penned a 15-year capacity lease agreement with Constitution.

Constitution is owned by subsidiaries of Williams Partners LP, Cabot Oil & Gas Corp., Piedmont Natural Gas Co. and WGL Holdings (see Shale DailyJune 3, 2013). Cabot, one of the biggest Marcellus operators, has agreed to ship 500,000 Dth/d on the pipeline, while Southwestern Energy Services Co. has signed on for 150,000 Dth/d (see Shale DailyApril 27, 2012). Piedmont, a distribution company that serves more than one million customers in the Carolinas and Tennessee, is investing $180 million, but it would not be a customer (see Shale DailyNov. 14, 2012).

Cabot is "cautiously optimistic" that Constitution will be brought into service in late 2015 or early- to mid-2016, CEO Dan Dinges said during a conference call with analysts Friday morning.

"However, given the uncertainty that still surrounds the final approval process, we are assuming in our budgeting right now for a July 2016 in-service date, but remain somewhat optimistic that there's still an opportunity to have Constitution in service by the end of 2015," Dinges said.

"The Constitution is just one component to several infrastructure projects that will be implemented up in the Northeast. But certainly the Constitution is one of the most impactful near-term inflection points, and we think we're going to be able to get a half a Bcf of our gas to a different price point and that price point, certainly currently and historically, has been a better price point than the general market." Cabot gas would move from the Wright Compressor Station in upstate New York into the Iroquois pipeline going north and south, and would be priced at Tennessee Zone 5 Line 200, which feeds the Boston area, company officials said.

The size and complexity of the projects prompted the U.S. Department of the Interior and the Environmental Protection Agency earlier this year to ask FERC to extend the comment period for the DEIS (see Shale DailyMarch 26).

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