Spectra Energy Corp. has filed an application at FERC to expand its Texas Eastern Transmission and Algonquin Gas Transmission interstate pipeline systems to serve the New Jersey and New York natural gas markets, the Houston-based company said Monday.

"The Northeast region's demand for natural gas is expected to steadily grow over the long term, so we are closely focused on developing projects in the region that are sized and timed to respond to both supplier needs to move new volumes as well as market needs to gain access to new supplies," said Spectra CEO Greg Ebel.

The $850 million New Jersey-New York Project would include construction of approximately 15.5 miles of new pipeline through parts of Bayonne, Jersey City and offshore Hoboken in New Jersey, as well as parts of Staten Island and Manhattan in New York. In addition, about five miles of pipeline will be replaced in Linden, NJ, and Staten Island, and some existing facilities will be modified in New York, New Jersey and Connecticut. The project is expected to be in service in November 2013.

In a prelude to the filing, a spokeswoman said the expansion would provide new diversified supply, as much as 800 MMcf/d, to the region (see Daily GPI, Dec. 15). The project is fully subscribed with commitments for firm transportation service from Chesapeake Energy Marketing Inc., Consolidated Edison Company of New York Inc. and Statoil Natural Gas LLC.

Jersey City officials had fought the project with zoning changes (see Daily GPI, Nov. 11). Critics of the project have said the initial route contemplated by Spectra would have cut through densely populated and historically significant neighborhoods.

Following more than 300 meetings with property owners and other stakeholders, Spectra has made "numerous adjustments to the route," Ebel said. "This is a critically important part of the process and helps ensure we develop the project the right way."

But Jersey City "lacks any confidence that the project, as currently proposed, will ever be constructed in a way that mitigates expected impacts," Healy said in a letter to the Federal Energy Regulatory Commission (FERC) dated Dec. 20. The city plans to move to intervene in the case and urged FERC to ensure that it has enough time and evidence "to allow for meaningful review and...consider alternatives, including a no-action alternative."

In late November the New Jersey Department of Environmental Protection's Office of Permit Coordination and Environmental Review was less than satisfied with the route then being considered (see Daily GPI, Nov. 24).

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