FERC on Friday issued a favorable environmental assessment (EA) for Alliance Pipeline LP's Tioga Lateral Project that would deliver liquids-rich natural gas from the Permian Basin to the Chicago market hub.

"Approval of the proposed project, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment," the staff of the Federal Energy Regulatory Commission said in the EA.

Alliance proposes to build a 79.3-mile lateral that would extend from Hess Corp.'s existing processing facility in Tioga, ND, to the Alliance mainline near Sherwood, ND, with ultimate delivery to Chicago, as well as a 6,000 hp compressor station [CP12-50]. A precedent agreement has been executed with Hess as an anchor shipper on the Tioga Lateral, according to the pipeline.

The proposed lateral would be able to provide up to 106.5 MMcf/d of new transportation capacity to the Chicago market, according to the FERC EA. The project has a planned in-service date of July 2013, subject to regulatory and other required approvals.

"Our Tioga lateral will enable North Dakota producers to realize revenues from gas that might otherwise be flared and will also stimulate the development of more receipt points and extensions," Alliance President Murray Birch said last September during an open season.

The Alliance Pipeline system consists of an approximately 2,311-mile integrated Canadian and U.S. high-pressure gas transmission system, delivering rich gas from the Western Canadian Sedimentary Basin and the Williston Basin to the Chicago market hub. The U.S. portion of the system is owned and operated by Alliance Pipeline LP, and consists of about 900 miles of mainline and related infrastructure.

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