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Texas Eastern’s Bayway Lateral Wins FERC Approval
Five months to the day after losing its quorum, FERC on Monday issued a certificate of approval for Texas Eastern Transmission LP’s proposed Bayway Lateral Project, which would fuel a refinery and an adjacent co-generation plant in New Jersey.
Despite the lack of a quorum, the Federal Energy Regulatory Commission had the authority — specifically, under Section 7(c) of the Natural Gas Act and Part 157 of its own regulations — to issue a certificate of public convenience and necessity for the $30.9 million project [CP16-473] since it was unopposed.
Texas Eastern, a wholly-owned subsidiary of Spectra Energy Partners LP, has proposed building and operating the Bayway Lateral — a 24-inch diameter pipeline that would run approximately 2,300 feet, beginning at an interconnection with Texas Eastern’s existing 42-inch diameter Line 38. The lateral would then extend to two facilities located in Linden, NJ: Phillip 66’s Bayway Refinery and a gas-fired power plant owned by Cogen Technologies Linden Venture LP. Enbridge Inc. acquired Spectra earlier this year.
“The timely issuance of the certificate keeps Texas Eastern on track to begin construction later this year and place the project facilities into service early in 2018,” Enbridge spokesman Arthur Diestel told NGI on Thursday.
The Bayway Lateral will provide up to 300,000 Dth/d of firm transportation service. According to FERC records, Phillips 66’s refinery converts up to 238,000 b/d of crude into gasoline, diesel fuel, jet fuel and heating oil. Meanwhile, Linden Cogen owns an 800-megawatt (MW) combined-cycle generation facility on land leased from Phillips 66 within the refinery yard. The power plant produces steam for the refinery and 645 MW for two regional transmission operators: PJM Interconnection LLC and the New York Independent System Operator.
The project will include a new metering and regulating station with two separate delivery points, plus related appurtenances and ancillary facilities.
Texas Eastern has executed agreements, with primary terms of 20 years, with both Phillips 66 and Linden Cogen for all of the project’s capacity. The companies signed up for 66,000 and 234,000 Dth/d of capacity, respectively.
FERC staff completed an environmental assessment (EA) for the project last November. Although the U.S. Environmental Protection Agency (EPA) said it was concerned by conflicting estimates of the project’s impacts on wetlands, the Commission said in its EA that Texas Eastern will try to avoid such impacts and follow mitigation procedures. The EPA also voiced concern over greenhouse gas (GHG) emissions, but FERC said the EA “adequately addressed” GHG emissions.
The FERC order also shows the New Jersey Department of Environmental Protection (NJDEP) stated concern over several issues, including a lack of groundwater data and the potential impact horizontal directional drilling (HDD) and drilling mud from the project could have on the bedrock aquifer. The NJDEP also said it was concerned HDD could potentially impact five nearby underground storage caverns operated by Phillips 66. Two of the caverns are used to store propane, while the remaining three are used for butane and isobutane.
In response to concerns by the NJDEP, FERC said Texas Eastern conducted groundwater testing and collected samples to determine the best method to treat and manage any future water discharges. The company also applied for various dewatering permits with the NJDEP. Texas Eastern also pledged to use a temporary steel casing during HDD operations to prevent contamination of the bedrock aquifer. FERC said it reviewed the company’s plans and called them “sufficient to prevent cross-contamination during HDD activities.”
On the caverns issue, Texas Eastern said its drilling activities will never be closer than 300 feet from a cavern. “Upon review, it is concluded that Texas Eastern’s proposed HDD plan, drafted in consultation with Phillips 66, adequately mitigates the concerns regarding drilling near the storage caverns,” FERC said.
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