Inergy Midstream, UGI, WGL to develop interstate project
Kansas City-based Inergy Midstream, L.P. has outlined plans to construct a 200-mile pipeline to transport natural gas from north-central Pennsylvania to a gas-distribution center in the Washington, D.C. area, to supply at least 800,000 MMBTU/day of fuel to the Mid-Atlantic region. Inergy has enlisted affiliates in the project, UGI Corp. and WGL Holdings Inc. Each one is expected to contribute equally and hold equal stakes in the approximately $1 billion project.
John Sherman, Inergy Midstream president and CEO, stated: “This project is a natural extension of Inergy Midstream’s storage and transportation platform in the Northeast. We are committed to developing the critical infrastructure that natural gas customers desire.”
Pennsylvania is at the heart of the Marcellus Formation, an expansive deposit of natural gas estimated at 168,000 billion cubic feet, and the site of numerous gas exploration, storage, refining, and transportation projects.
The new Commonwealth Pipeline would be operative in 2015. The 30-in. pipeline will run from the southern terminus of Inergy Midstream’s MARC I pipeline in Lycoming County, Penn., through UGI’s utility service areas in central and eastern Pennsylvania to an interconnection point with WGL’s gas distribution system near Rockville, Md., and establish what the investors call “a more cost-effective transportation path versus traditional routes.”
Once the MARC I and the Commonwealth Pipeline are completed, shippers will be able to transport volumes of natural gas “bi-directionally” to or from multiple pipelines across the Northeast and Mid-Atlantic. The pipeline is expected to cross and interconnect several other interstate pipelines, so producers would have access to an expanding supply market, and millions of customers will have more diversity of supply.
“We are pleased to be working with UGI and WGL to develop this significant infrastructure project, which will provide direct access to new demand markets for gas producers,” stated SVP and COO Bill Moler of Inergy Midstream. “Gas production in the northern tier of Pennsylvania has been limited by the lack of take-away capacity in existing interstate pipelines, most of which currently serves markets in the Northeast. The Commonwealth Pipeline is expected to provide much-needed transportation capacity to desirable new and growing demand markets in the Mid-Atlantic.”