Marcellus Shale gas line gets federal nod

06/06/10 0 COMMENTS

HARRISBURG, Pa. Federal energy regulators have approved a $700 million pipeline project designed to bring cheap Marcellus Shale natural gas from Pennsylvania into high priced markets in New England and New York.

The project’s backers said cheap jerseys Wednesday that the Federal Energy Regulatory Commission’s approval means the 124 mile Constitution Pipeline could be operational by next winter, if it gets the remaining regulatory approvals from various state and federal agencies in a timely fashion.

The lead partners are Tulsa, Oklahoma based Williams Partners LP and Houston based Cabot Oil Gas Corp. Williams will operate the pipeline, while Cabot and Southwestern Energy have long term agreements to supply the gas. Other partners include Piedmont Natural Gas Company Inc. and WGL Holdings Inc.

Lindsay Schneider, an analyst at Wood Mackenzie, said the pipeline could bring up prices for producers like Cabot in northern Pennsylvania, while potentially bring down home heating prices in New York and New England. But calculating the effect on home heating prices would be difficult to do, she said.

The Marcellus Shale is the largest known underground natural gas reservoir in Pennsylvania. Production from the reserve, beginning in the last five years, has made Pennsylvania the nation’s second largest natural gas producer behind Texas.

Marcellus Shale gas is about half the cost of the Gulf of Mexico gas that traditionally reached Boston and New York City through existing pipelines. It also is cheaper than Canadian gas that flows to the Northeast.

The pipeline would run from Pennsylvania’s Susquehanna County through New York’s Broome, Chenango, and Delaware counties to connect with the existing Tennessee and Iroquois pipelines in the Schoharie County town of Wright, 80 miles southwest of Albany, New York.

The Northeast has become increasingly reliant on natural gas for home heating, but congested pipelines are ill equipped to bring the gas directly from Pennsylvania.

"); pageTracker._trackPageview(); } catch(err) {}