Laser Northeast Gathering Company LLC broke ground on the New York portion of its proposed gathering system Wednesday and also announced a $60 million expansion of the Marcellus Shale midstream project.

The company began building the Pennsylvania portion of its Susquehanna Gathering System in February (see Shale Daily, Feb. 3). The $50 million first phase of the system will run 30 miles from Susquehanna County, PA, to the Millennium interstate pipeline in Broome County, NY, and is expected to come online in the third quarter of the year.

The second phase would expand the system to the southwest and southeast. The southwest expansion would connect the new mainline to the interstate Tennessee Gas Pipeline via nine miles of 24-inch diameter pipeline. The southeast expansion would connect the Tennessee Gas Pipeline to producing acreage in Wyoming County via nine miles of 16-inch diameter pipeline.

Laser said it has acquired all of the rights-of-way for the second phase and secured the site for a compressor. The expansion would triple the size of the system, adding 1.4 Bcf/d of pipeline capacity.

Susquehanna County is consistently among the most productive in the entire Marcellus, accounting for 60.8 Bcf during that last six months of 2010, the most recent figures available, but permitting records show that operators are increasingly showing interest in neighboring counties to the south (see Shale Daily, July 13; Feb. 28).

Laser Northeast is still waiting to find out whether it can operate as a public utility in Pennsylvania (see Shale Daily, July 12; May 20). The company already got certification from New York regulators back in February.