A Kentucky producer has called on FERC to quickly approve Equitrans LP’s proposed pipeline to ease the capacity constraint in the eastern part of the state that has led to natural gas production being shut in over the past two years.
The Federal Energy Regulatory Commission in late September issued a favorable final environmental analysis (EA) of Equitrans’ Big Sandy Pipeline project, but it has yet to issue a certificate (see Daily GPI, Oct. 2). “We…request that the Commission immediately issue Equitrans’ certificate prior to the expiration of the comment period for the Commission’s recently issued environmental assessment,” wrote Jerome A. Kanney, general partner of Pikeville, KY-based Interstate Natural Gas Co., in a letter to FERC Friday.
This project “is very important for producers in our area,” some of whom have had up to 100% of their natural gas production shut in since Feb. 15 of this year and during much of 2005, Kanney said.
“The economic impact of this proposed $140 million investment in Kentucky would be far-reaching. With current curtailments, the Cove Point LNG expansion, the continued growth of coalbed methane and increased area drilling, we believe it is very important to have this needed pipeline,” Interstate Natural Gas told the Commission.
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 [CP06-275]. The 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.
Interstate Natural Gas Co., which operates in eastern Kentucky and western West Virginia, said it plans to sign a 10-year agreement with Equitrans for transportation services on the Big Sandy Pipeline.
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.
In addition to the Big Sandy pipeline project, Interstate Natural Gas said it favors the construction of Atmos Energy’s Straight Creek Gathering project in eastern Kentucky. “We think there’s a need for both pipelines due to the significant drilling” and coalbed methane activity, Kanney said. “We’re supporting both pipelines.”
FERC earlier this month cleared the way for Straight Creek Gathering LP, an affiliate of Dallas-based Atmos Energy, to build a 60-mile pipeline that would serve as the backbone of a new gathering system in eastern Kentucky (see Daily GPI, Oct. 4). The project also is designed to help ease the transportation constraint that has placed a significant amount of gas production off-line in the region.
Specifically, the Commission issued a declaratory order that found that Straight Creek’s proposed facilities would primarily perform a gathering function exempt from the agency’s jurisdiction. In addition, FERC granted the company’s request for a limited-term, limited-jurisdiction certificate that would allow it to transport interstate gas from Columbia Gas Transmission’s PM-83 Line for two years until Straight Creek can build its own gathering lateral to access gas currently transported on Columbia’s pipeline.
Straight Creek proposes to build a line that would originate in Floyd County, KY and extend north to interconnect with the Tennessee Gas Pipeline system in Carter County [CP06-369]. The 20-inch diameter system would be capable of initially moving up to 110,000 MMBtu/d of gas, with the ability to expand throughput to 225,000 MMBtu/d. It also plans to construct various four- to 12-inch diameter laterals or feeder lines from the proposed backbone pipeline to production fields in Magoffin, Pike, Martin, Lawrence, Elliott and Johnson counties in eastern Kentucky.
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