FERC on Friday issued a favorable environmental review of Equitrans LP’s pipeline project that seeks to ease the capacity constraint in eastern Kentucky that has led to natural gas production being shut in for much of the year in that region.

“The approval of the proposed project, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment,” FERC staff, in cooperation with the Army Corps of Engineers, said in an environmental assessment (EA) of the project [CP06-275].

Equitrans, a subsidiary of Equitable Resources in Pittsburgh, PA, proposes to build a 68-mile, 20-inch diameter pipeline and associated facilities that would extend from Equitable Resources’ Kentucky Hydrocarbon plant in Langley in eastern Kentucky to Tennessee Gas Pipeline’s Broad Run Lateral in Carter County. The so-called Big Sandy Pipeline project would provide 130 MDth/d of takeaway capacity for Kentucky producers to transport Appalachian gas to markets in the Mid-Atlantic and Northeast regions. The anticipated in-service date for the project is April 1, 2007, according to the EA.

Currently, production gas flow from the Kentucky basin is limited due to the availability of only one pipeline, Columbia Gas Transmission’s Line KA-20, according to Equitrans. This has led to significant curtailments of gas production in the region. Equitrans believes its proposed Big Sandy Pipeline would provide much needed relief from summer capacity constraints affecting the eastern Kentucky basin and would provide capacity for additional production growth. The East Kentucky Independent Oil and Gas Association has pegged shut-in gas in Kentucky at approximately 65-70 MMcf/d due to limited pipe capacity.

Equitrans is not the only company proposing a pipeline for the region. Dallas, TX-based Atmos Energy is seeking to build a line that would originate in Floyd County, KY, and extend north 50 miles to interconnect with the Tennessee system in Carter County as well [CP06-369]. The 20-inch diameter system would be capable of initially moving up to 100,000 MMBtu/d of gas, with the ability to expand throughput to 225,000 MMBtu/d (see NGI, Aug. 28). The company plans to add gathering pipeline infrastructure and compression as demand requires. The company has requested that its so-called Straight Creek project be declared gathering and exempt from FERC jurisdiction under the Natural Gas Act.

Both companies had expected FERC to issue certificates for their pipeline projects by late September. Atmos Energy’s Straight Creek filed a petition for expedited action last week, asking FERC to approve its project by October at the latest. “Straight Creek must commence clearing right-of-way in November 2006 in order to complete [the] activities during the winter 2006-2007 construction window and thereby prevent or mitigate…any potential adverse impacts on environmental resources,” it said.

“Furthermore, in order to meet seasonal market demand and market demand associated with the summer 2007 storage injection season, Straight Creek will need to have its gathering system operational as early as possible in 2007.” If FERC acts in October, the company said it hopes to have its system in operation by April-May 2007.

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