The U.S. Court of Appeals for the Third Circuit this week stayed construction of the PennEast Pipeline pending the outcome of an appeal filed by New Jersey challenging the project’s ability to exercise eminent domain for preserved state land.

Construction has not yet started on the 120-mile system as crews were granted access by a lower court in December to survey land on 136 properties where private landowners had tried to stop the activity. In that case, Judge Brian Martinotti of the U.S. District Court for the District of New Jersey found that PennEast’s certificate order from FERC entitled it to survey access on an expedited basis and dismissed efforts by New Jersey Attorney General Gurbir Grewal to block access to 40 parcels of state land preserved for recreation, conservation and agricultural purposes.

The Third Circuit on Tuesday stayed Martinotti’s order, allowing the surveys to proceed, but specifying that construction would not be allowed to proceed if PennEast transitions to that stage before the appeal is resolved.

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Grewal filed the motion to stay on behalf of several state agencies earlier this month, requesting that the state’s appeal also be expedited “before PennEast makes too many permanent changes to state properties.” The Third Circuit granted the request and is expediting the appeal.

PennEast spokesperson Patricia Kornick said the project’s backers “view the expedited schedule positively” and are “confident the New Jersey district court’s ruling will stand. She added that Martinotti “thoroughly reviewed and evaluated each of the state’s arguments in the context of applicable law and concluded the state’s arguments are not grounded in law and that the PennEast Pipeline is able to advance.”

While the stay doesn’t immediately impact PennEast’s timeline, it demonstrates some issues the project has faced since it was certificated by the Federal Energy Regulatory Commission in January 2017. The state Department of Environmental Protection denied the company’s water quality certification (WQC) application in 2017, deeming it incomplete in part because of a lack of landowner permission to survey certain parts of the proposed route. The state has also targeted FERC’s approval of the project.

PennEast needs to complete the surveys authorized by the lower court so it can apply for the WQC, which it plans to do once they’re complete. Kornick said the company is still targeting late 2019 to start construction. The project had once aimed to start construction last year and bring the system online this year. 

New Jersey Sierra Club’s Jeff Tittel, director, welcomed the stay as “good news,” saying PennEast could ultimately be delayed by a year or more. “When it comes to this pipeline or other natural gas projects, the more we can delay, the better the chance it could be stopped,” he said.

PennEast would move more than 1 Bcf/d from northeastern Pennsylvania to New Jersey. About one-third of the pipeline would be in two New Jersey counties.