Dominion has secured firm, long-term commitments to receive natural gas from Rockies Express (REX) and deliver it to major markets in the Northeast and Mid-Atlantic regions, the company said Thursday.
Dominion’s project, named Dominion Hub I, is the first transportation project to provide firm access from REX to the Northeast and Mid-Atlantic regions, Dominion said. The company announced the project in May along with a nonbinding open season that ended June 27. In addition to unspecified transportation capacity, the open season solicited interest in 18 million Dth of storage capacity and 300,000 Dth/d of deliverability.
Other than that, the company is not saying much about the project just yet. A spokesman declined to describe the project in any greater detail. Someone else with the company said that details are being kept confidential because the project’s first customer, a Rocky Mountain producer, does not wish to be known.
“We are proud to offer Rocky Mountain basin producers market access for this new gas supply,” said Dominion Transmission President Gary Sypolt in a statement Thursday. “The robust Dominion natural gas pipeline and storage grid ensures that REX shippers will have year-round access to local distributors, industrial consumers and power generation markets throughout the eastern seaboard.”
The cornerstone of the Dominion Hub I project is an agreement to transport gas from Ohio to the Dominion market area. Subject to regulatory approvals, Dominion expects to complete related facility construction and begin firm service in November 2009.
“Producers and end-users alike will benefit from the flexibility and dependability of Dominion’s hub-like pipeline system,” said Dominion Energy CEO Paul Koonce at the time of the open season announcement. “Dominion’s pipeline system is interconnected with multiple pipeline systems and provides access to growing markets in the Northeast and Mid-Atlantic.”
Access to these markets is just what gas moving on REX will need, according to a recent analysis by Bentek Energy LLC (see Daily GPI, Aug. 10). The first and second legs of REX East will land gas in western and then eastern Ohio, respectively. The first leg of REX East is scheduled to come on-line in December 2008, the second leg in June 2009. In a report released last week, Bentek analysts wrote that much new takeaway capacity is needed from this region in order to get REX gas to higher-value Northeast markets.
The Dominion system, formerly Consolidated Natural Gas, a northeastern, north central regional network, is composed of pipelines stretching from southwestern Ohio, through the western part of West Virginia, Pennsylvania and northern New York state, paralleling the western side of the Appalachian Mountains. It is an area that holds most of the storage fields in the Northeast, many of them owned by Dominion. Dominion’s lines cross and/or connect with most of the long lines serving the East, including Texas Gas, Texas Eastern, Tennessee Gas and Columbia Gas, as well as with National Fuel Gas, Empire State, Iroquois and the new Millennium system in the north.
Dominion spokesman Robert Fulton told NGI Thursday that he could not provide any more details on the project. He said there was no time frame yet set for the project’s filing with the Federal Energy Regulatory Commission. “We’re formulating the project as we speak,” Fulton said.
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