Another Company Seeks OK to Pipe Cheap Natural Gas through New Jersey

Tom Johnson | March 30, 2015 | Energy & Environment
Transco wants to boost capacity of existing pipeline running from Central Jersey to Mississippi for markets in Southeast

natural gas compressor
Another energy company wants to take advantage of cheap supplies of natural gas from the Marcellus Shale formations in Pennsylvania — this time to ship it from New Jersey to markets in the Southeast.

Transco is seeking approval from the Federal Energy Regulatory Commission (FERC) to expand its interstate natural gas pipeline, stretching from Mercer County in central Jersey to as far south as Holmesville, MS. Transco, owner of one of the nation’s largest pipeline systems, is a subsidiary of William Partners L.C., based in Tulsa, OK.

The $275 million project does not propose to build any new pipeline in New Jersey, but simply to increase capacity to the existing system by adding additional compression to move the product to meet growing demand in the Southeast.

In Mercer County, that means expanding the capacity of a compressor station there to boost the capacity of the curent pipeline, according to Tom Droege, a spokesman for Williams. The only new pipeline envisioned in the project involves a 111-mile pipeline from the existing interstate system to Georgia, which involves a partnership with AGL Resources, the owner of New Jersey-based Elizabethtown Gas.

With approximately a dozen new projects pending in the state, the rapid expansion of the pipeline system has become increasingly contentious, in part, because many of the projects would traverse lands set aside for open space and farmland preservation.

Beyond that, environmentalists are concerned that drilling operations in Pennsylvania and nearby states could end up polluting the Delaware River, the source of drinking water for 15 million people in the region. Those operations involving injecting huge amounts of water and chemicals into rock formations to gain access to the natural-gas deposits.

[related]But the expansion of the natural gas pipeline system has been strongly endorsed by the Christie administration and most business interests. Not only has it delivered big savings for consumers and companies depending on the fuel to heat homes and businesses, it also has helped drive down the price of electricity in a state with some of the highest energy costs in the nation.

The steep drop in natural gas prices — some consumers have seen their heating bills drop by one-third or more — is pushing gas utilities to get access to the cheaper supplies. With tougher environmental rules proposed by the Obama administration, many older coal-fired plants will be retired, replaced by new or expanded natural-gas generation.

“As long-term demand for natural gas continues to grow, particularly in the power-generation sector, we’re executing a series of large-scale integrated projects … that move surging supplies in the Northeast to high-value markets along the Eastern Seaboard and in the Southeast,’’ said Rory Miller, senior vice president of Williams’ Atlantic-Gulf operating area.

Jeff Tittel, director of the New Jersey Sierra Club, noted that the proposed PennEast pipeline, will hook into the line, if approved. “We get the pipeline, but the gas can go anywhere,’’ he said. The proposed pipeline has generated much opposition in New Jersey, not only because it goes through preserved areas, but some very wealthy parts of the state.

But Droege said the increased capacity of the compressor station in Mercer County, will not create problems. “You will not even notice it,’’ he said.

If approved by FERC, construction is planned to begin in the third quarter of 2016 and completion targeted for 2017, according to the company.