PSEG Power Sells Its 10% Share in PennEast Pipeline to Spectra Energy
Company remains committed to buying 125,000 decatherms of natural gas a day once pipeline is operational
The PennEast pipeline project has one less partner; PSEG Power LLC announced yesterday that it is selling its 10 percent minority share to Spectra Energy Partners, LP, which is doubling its investment in the proposal.
The news comes less than a week after the Newark company, a subsidiary of Public Service Enterprise Group, disclosed it was looking toin the 118-mile pipeline that begins in Luzerne County, PA, and ends near Trenton.
The project, beset by numerous delays, is designed to bring low-cost natural gas from the Marcellus Shale region in Pennsylvania to the New Jersey and metropolitan markets.
Typically, the sale of a minority share in a pipeline project would barely register a blip, but the PennEast pipeline has become so controversial that any changes in the proposal tend to be closely scrutinized by both proponents and foes.
“We’re pleased with PennEast’s progress, and are excited to have Spectra Energy Partners, with its extensive experience in the region, become an equal equity partner,’’ said Dat Tran, chairman of the board of managers for PennEast.
Despite shedding its investment, PSEG Power, the owner and operator of a fleet of natural-gas power plants in New Jersey and the region, remains committed to buying 125,000 decatherms a day. Financial terms of the deal were not disclosed.
“This project will provide Public Service Electric & Gas (the utility subsidiary of PSEG) with greater and more reliable access to affordable natural gas,’’ said Bill Levis, president of PSEG Power. “We’ve decided to put our focus on our core business — constructing three new combined-cycle power plants and running our diverse fleet of generation plants.’’
In a press release, PennEast said it remained on track to receive an Environmental Impact Statement from the Federal Energy Regulatory Commission in April. The company hopes to have the new pipeline in service in the second half of 2018.
Opponents had a different take on the sale.
“PSEG’s sale of its stake in the PennEast pipeline is a reflection of the intense and growing opposition in New Jersey,’’ said Tom Gilbert, campaign director of ReThink Energy NJ and New Jersey Conservation Foundation.
“Spectra’s move to acquire PSEG’s share in PennEast will enable it to further increase its exorbitant profits by building an unneeded pipeline on the backs of consumers,’’ he added. Spectra is owned by Enbridge.
The other New Jersey partners in the project are NJR Pipeline Co., a subsidiary of New Jersey Resources; SJI Midstream, a subsidiary of South Jersey Industries; and Southern Gas Co., the owner of Elizabethtown Gas.