New Jersey Resources Corp. (NJR) subsidiary Adelphia Gateway LLC has successfully completed a binding open season for a 250,000 Dth/d pipeline that would serve growing demand for natural gas in the Greater Philadelphia region.
Adelphia said it received bids for more than double the initial offered capacity for terms up to 20 years. NJR COO Stephen Westhoven said the open season “demonstrates the demand for clean, safe, low-cost natural gas in the Greater Philadelphia area,” adding that the project would utilize existing infrastructure in a “constrained marketplace.”
The 84-mile Adelphia pipeline originates in Northampton County, PA, and runs south to the borough of Marcus Hook in Delaware County. It has interconnections with the Texas Eastern Transmission system and the Columbia Gas Transmission system.
NJR acquired the pipeline, which once delivered oil to a refinery in Marcus Hook, from Talen Energy Corp. for $189 million last month. It plans to repurpose the southern 50-mile portion of the system to deliver natural gas to the Philadelphia area. Under the sale agreement, the remaining 34-mile northern segment, which was converted to deliver natural gas in 1996, would supply Talen’s Martins Creek and Lower Mount Bethel power plants.
Adelphia said it’s working to finalize precedent agreements and file its application with the Federal Energy Regulatory Commission. The deal with Talen is expected to close next year and Adelphia expects to place the pipeline into service in late 2018.
Adelphia launched the open season last month shortly after it announced the acquisition and later extended it through Dec. 8. While it’s not related, the project complements efforts underway in Philadelphia to boost the region’s consumption of natural gas in order to attract more energy companies and energy-intensive manufacturing to the city and surrounding areas.