FERC rounded out a Northeast trifecta of sorts late Friday when it approved National Fuel Gas Co.'s 490,000 Dth/d Northern Access expansion project, fulfilling management's hopes of getting the project approved before the Commission lost its quorum.
NFG's exploration and production subsidiary, Seneca Resources Corp., saw its outlook improve in the fiscal first quarter, which started in October, as Appalachian spot prices were up allowing it to open more wells after two years of voluntary curtailments in Pennsylvania. CEO Ronald Tanski said Friday before the Federal Energy Regulatory Commission (FERC) approved the project that its "biggest opportunity to increase the value of the company hinges on the installation of more pipeline infrastructure to move gas out" of the state.
FERC's order granting NFG subsidiaries certificates of public convenience and necessity to construct and operate Northern Access was one of several that came on Commissioner Norman Bay's last day, which now leaves the Commission without a quorum and the inability to vote on important projects or rules. Northern Access was one of the last projects approved and notice was issued after hours on Friday.
National Fuel Gas Supply Corp. and Empire Pipeline Inc. filed a joint application for the project in March 2015. Initially expected to be in-service late last year, the project was delayed in February 2016 after NFG said curtailments and a reduction in drilling activity would make it difficult to fill. Last month, the company said unanticipated delays in FERC's approval process would limit its ability to start development along portions of the 99-mile route before designated environmental protection periods begin this April and last through the end of July.
The company said on Saturday that it's still targeting its fiscal 2Q2018 for in-service, but it can now move forward with securing the remaining rights-of-way, clearing trees and construction. Northern Access would expand the Empire and NFG Supply systems to move gas from Seneca-operated wells in Northwest Pennsylvania to markets in New York, Canada and the Northeast and Midwest. It would consist of 99-miles of new pipeline in McKean County, PA, and Allegheny, Cattaraugus, Niagara and Erie counties, NY, along with compression facilities.
"As the Northeast becomes increasingly more reliant on this nearby supply source, and in order to meet the growing demand from residential and commercial customers as well as from electric utilities that are replacing their coal-fired electric plants with natural gas-fired generation, the infrastructure required to provide these supplies must be built," said Empire President Ronald Kraemer.
Seneca also got relief on Friday with FERC's approval of the 1.7 Bcf/d Atlantic Sunrise project, which would move Marcellus gas to markets in the Southeast through the Transcontinental Gas Pipe Line Co. system. Seneca has contracted for more than 189,000 Dth/d on Atlantic Sunrise. FERC also approved a third major Northeast takeaway project on Friday with a certificate for the 3.25 Bcf/d Rover Pipeline project.