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PennEast Welcomes DRBC Input, But Says FERC Ultimate Arbiter For Pipeline

PennEast Pipeline Co. LLC officials said they were not surprised that the Delaware River Basin Commission (DRBC) wants to review its proposed Marcellus Shale natural gas pipeline to traverse the basin and welcome its input, but the ultimate arbiter for approving the project is FERC.

In a letter dated Nov. 14, DRBC officials told PennEast that its proposed 108-mile, 36-inch diameter pipeline from Luzerne County, PA, to Mercer County, NJ, falls under the commission's purview (see Shale DailyNov. 19).

Patricia Kornick, a spokeswoman for PennEast, told NGI's Shale Daily the correspondence from the DRBC was "just a normal course of business" and part of a bigger picture -- receiving ultimate approval from the Federal Energy Regulatory Commission.

"We're working with about 20 regulatory agencies and the DRBC is one of those agencies," Kornick said last Monday. "FERC has a very comprehensive review process, and we're only three months into it. It's approximately a three-year process, so we're just now into the initial stages.

"Part of the review process is our being able to work with various agencies to obtain early input. It's no different than working with the [Pennsylvania or New Jersey] Department of Environmental Protection, or the [U.S.] Department of Agriculture or state historic preservation organizations. Certainly there are waterways involved and we would expect the DRBC to want to have some input into it. We encourage that, we welcome that input. It's not something that was a surprise to us.

"But FERC is the agency of jurisdiction for interstate natural gas pipelines."

Kornick said if the DRBC or another agency recommended changes to the project, PennEast would make them if they were "feasible and advisable" to do.

"We will work with them, and it's not strictly with agencies. We've been working with landowners as well," Kornick said. "Any of them would have input. If they were to suggest something such as altering the routes we would do that as well. We will work with them to determine the safest and most constructible route that will minimize impact to the communities and the environment."

The proposed pipeline would interconnect to the Transcontinental Gas Pipeline (Transco) and have a capacity of 1 Bcf/d. A binding open season held in September yielded 965,000 Dth/d of bids (see Shale DailySept. 5Aug. 12).

The DRBC has asked PennEast to submit a formal application within 90 calendar days, and to request a pre-application meeting. The Commission and the company held a preliminary meeting to discuss the project in early September. A de facto moratorium bars oil and natural gas development in the Delaware River Basin.

In October, FERC approved PennEast's request to initiate a pre-filing review for the project (see Shale DailyOct. 17). PennEast plans to complete the pre-filing process and submit a formal application to FERC in 3Q2015, and expects a decision by 2016. Pending FERC approval, construction of the pipeline could begin in 2017 and would take one year to complete.

Also in October, Spectra Energy Partners became the sixth member company of PennEast (see Shale DailyOct. 31). Other stakeholders include AGL Resources; NJR Pipeline Co., a subsidiary of New Jersey Resources; PSEG Power LLC; South Jersey Industries; and UGI Energy Services, a subsidiary of UGI Corp. Spectra and PSEG each hold a 10% interest in the project, while the remaining four companies each have a 20% stake.

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