Big pipelines eyed for Western Pennsylvania
By Rick Stouffer
Published: Tuesday, Nov. 13, 2007,
Four pipelines costing as much as $2.3 billion combined are proposed to move billions of cubic feet of natural gas from eastern Ohio through Western Pennsylvania to the East Coast.
Publicized only within the last few weeks within industry publications, the four projects hope to carry less expensive Rocky Mountain natural gas eastward, to link with other major pipelines and East Coast destinations where cheaper natural gas is in high demand.
"This project gives us the ability to move Rockies gas to the mid-continent and eastern portions of the country," said John Sheridan, a spokesman in Boston for Spectra Energy Corp., one of four companies that proposed the projects.
For residents in Greene and Washington counties, there's a possibility their property could be impacted east to west by one or more pipelines, and north to south by Allegheny Energy Inc.'s new power transmission line, which is opposed by some public groups and politicians.
Interstate pipeline owners answer only to the Federal Energy Regulatory Commission, or FERC, which would approve the projects. The state Public Utility Commission has no jurisdiction.
"I'm not aware of any pipeline project," said Greene County Commissioner Pam Snyder, whose property near Jefferson would be affected by the power project.
The proposed pipelines include:
• Spectra's $100 million to $150 million Northern Bridge plan, which would link Clarington, Monroe County, Ohio, to the underground Oakford natural gas storage facility near Delmont, Westmoreland County, and come on-line in November 2009.
• Williams Cos.' $375 million to $500 million Rockies Connector, from Clarington to York County, bisecting Greene, Fayette, Somerset and Bedford counties, is slated for service in November 2010.
• The $563 million to $750 million REX Northeast Express would travel 375 miles from Clarington to Princeton, N.J., carrying natural gas through Greene, Washington, Westmoreland, Indiana, Cambria and Blair counties on its way east. Service would begin in late 2010. This pipeline is proposed by Kinder Morgan Energy Partners, Sempra Pipelines & Storage, and ConocoPhillips.
• The $707 million to $942 million Northeast Passage, proposed by El Paso Corp.'s Tennessee Gas Pipeline, would stretch 471 miles from Clarington to Pleasant Valley, Dutchess County, N.Y. It could potentially impact Greene, Fayette, Somerset and Bedford counties. The pipeline is slated for operation in November 2011.
"These are major pipeline players," said Skip Simmons, a Houston-based principal in the North American Gas Resource practice of consulting firm Wood Mackenzie.
Natural gas will move to Monroe County, Ohio, via a $4.4 billion, 1,680-mile-long pipeline originating in Colorado known as the Rockies Express. It will carry some 1.8 billion cubic feet of natural gas per day. A typical Western Pennsylvania residential customer annually uses about 98,000 cubic feet of natural gas.
It's doubtful all four of the pipeline projects will be built, as their total combined capacity is larger than that of the supplying pipeline, industry experts said.
"You really need two pipelines to handle the 1.8 billion cubic feet of natural gas per day coming east on the Rockies Express," said Jim Osten, principal, North American natural gas practice, Global Insight, Waltham, Mass.
The price is significantly cheaper for natural gas extracted from the ground in Colorado than the price available from major transmission pipelines that come from the South and connect to distribution companies such as Equitable Gas, Dominion Peoples or Columbia Gas of Pennsylvania.
"We haven't had any discussions with the project owners, but we're always evaluating proposals; having additional supply in the East never is a bad thing," said Columbia spokesman Matt Pitzarella.
The price for natural gas coming from the Rocky Mountains is about $1 per thousand cubic feet less than at Henry Hub in Louisiana whose price often serves as the nation's wholesale benchmark, according to Osten.
"Appalachian prices generally are 30 cents to 50 cents above the Henry Hub price. New York prices are 70 cents to $1 above Henry Hub. But in the winter New York prices can be $3 to $4 (per thousand cubic feet) above Henry Hub," Osten said.
Project owners currently are talking with potential customers. Natural gas pipelines are required to have customers aboard prior to digging a trench. Exact routes could change to better accommodate customers.
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