Shale Daily / NGI All News Access

Trio Seeks Shippers for Commonwealth Pipeline

Inergy Midstream LP, UGI Energy Services Inc. and Capitol Energy Ventures Corp., a unit of WGL Holdings Inc., are conducting a non binding open season for shippers to transport natural gas volumes on the proposed Commonwealth Pipeline, which would carry Marcellus and Utica Shale production to market.

The proposed 200-mile, 30-inch diameter system would carry up to 1.2 Bcf /d to city gates and interstate pipeline systems at points between the southern terminus of Inergy Midstream's MARC I pipeline in Lycoming County, PA, and the Dominion Cove Point LNG LP pipeline in Charles County, MD.

"The primary purpose of the Commonwealth Pipeline is to provide a direct and flexible path for bringing natural gas produced in the Marcellus and Utica Shale plays in Pennsylvania and neighboring states to growing natural gas markets in central and eastern Pennsylvania; the metropolitan areas of Philadelphia, Baltimore and Washington, DC; and the Delmarva Peninsula," the backers said. The "market pull" project would provide shippers with a short-haul transportation option for direct access to Marcellus and Utica gas supplies, thereby eliminating the expense of system-wide fuel and maintenance costs associated with long-haul pipelines traditionally bringing Gulf Coast supply to the Northeast and Mid-Atlantic markets, they said.

Service would begin in 2015. UGI Energy Services and Capitol Energy Ventures Corp. are expected to be anchor shippers on the line (see Shale Daily, March 2).

Rates for the Commonwealth Pipeline will be determined after the conclusion of the open season and depend on the final scope of the facilities and firm service commitments. The open season will close at 5 p.m. Central Time on June 8.

For questions concerning the open season or for open season packages, contact David Hooker at (816) 714-5494 or by e-mail at dhooker@cwpipeline.com. Open season packages are also available at www.commonwealthpipeline.com.

The sponsors expect to own equal equity interests in the project company formed to own the pipeline. Inergy Midstream will construct and operate the pipeline, which is expected to cost approximately $1 billion and be funded equally by the sponsors.

A recent analysis of the Marcellus region and natural gas infrastructure by LCI Energy Insight and Energy Ventures Analysis found that infrastructure developers are racing to keep up with producers. "At present, the Marcellus Shale play is the fastest growing gas play in the U.S.," LCI and EVA said. "In 2012, it is projected to account for over 40% of expected increases in U.S. shale production and approximately one-third of the increases in shale production in 2013," (see Shale Daily, Feb. 21).

Constitution Pipeline Co. LLC, a development launched in February by frequent partners Williams Partners LP and Cabot Oil & Gas Corp., last month executed precedent agreements for the proposed 121-mile natural gas pipeline, designed to connect Marcellus production in northeastern Pennsylvania to Northeast markets by spring 2015 (see Shale Daily, April 27). And Spectra Energy Corp. recently announced plans for Renaissance Gas Transmission, a pipeline which would carry Marcellus gas south to Georgia, Alabama and Tennessee (see Shale Daily, March 5).

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