Inergy LP subsidiary Central New York Oil And Gas Co. LLC has secured the binding agreements it needs in order to apply for permits to construct its MARC I Hub Line Project in Pennsylvania, the company said. The project is one of two complementary efforts the company has in the works that would serve Marcellus Shale production.
The MARC I Hub Line Project and the previously announced North-South Project would allow Inergy to wheel gas on a firm basis through approximately 75 miles of pipe to and from Tennessee Gas Pipeline Co.'s (TGP) 300 Line, Transco's Leidy Line and the Millennium Pipeline and all points in between. The projects are expected to add 45,000 hp of compression and 875,000 Dth/d of transportation capacity to Inergy's midstream business in the Northeast.
"These projects allow us to leverage our existing storage and transportation capabilities with the needs of our customers and the market in order to provide the infrastructure necessary to efficiently develop the Marcellus Shale and serve the growing Northeast natural gas markets," said Inergy CEO John Sherman.
The MARC I Hub Line would be a 43-mile, 30-inch diameter bidirectional pipeline in Bradford, Sullivan and Lycoming counties in Pennsylvania. It would extend between Inergy's Stagecoach South Lateral Interconnect with TGP near its compressor Station 319 and Transco near its compressor Station 517. The project is expected to have a minimum of 550,000 Dth/d of firm capacity.
Inergy has executed precedent agreements with minimum 10-year terms with anchor shippers and has begun a binding open season, ending Friday, to determine the final size of the project. The company said it expects to file an application with the Federal Energy Regulatory Commission for a Certificate of Public Convenience and Necessity this summer. The project is expected to enter service in mid-2012.
The North-South Project consists of additional compression and measurement facilities on the existing Inergy Stagecoach Laterals and when completed is expected to have firm capacity of 325,000 Dth/d. The project is supported by long-term contracts and is expected to be in service by late 2011.
"The MARC I and North-South projects add tremendous liquidity to our Stagecoach storage and transportation assets for marketers, producers and distribution companies alike," said Bill Moler, senior vice president of Inergy's midstream operations.
Earlier this year Bentek Energy LLC predicted that growing production from the Marcellus Shale would have a significant impact on basis across much of the pipeline grid (see Daily GPI, March 23). Even if only a few of the pipeline projects targeting the Marcellus are completed, the play's production is expected to displace traditional gas serving the Northeast -- from Canada, the Southeast/Gulf of Mexico, the Rocky Mountains and Midcontinent producing areas, Bentek Managing Director Rusty Braziel said.
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