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Access Northeast gas pipeline delayed to 2019

02 Nov 2016 19:39 GMT
Access Northeast gas pipeline delayed to 2019

Houston, 2 November (Argus) — Spectra Energy will likely have to delay its Access Northeast natural gas pipeline project expansion until 2019 or later, executives said during an earnings call today.

The midstream company originally expected the 894mn cf/d (25mn m³/d) project to come on line in the fourth quarter of 2018, providing fuel to powerplants throughout New England. But recent rulings by states in New England have put a roadblock in place for the project, Spectra chief executive Gregory Ebel said during a third quarter earnings call today.

A top court in Massachusetts found in August that a plan that would allow local electric utilities to sign contracts for pipeline capacity conflicted with a law that deregulated the state's electric market. New Hampshire utility regulators last month reached a similar ruling, and a Connecticut state agency in October cancelled a request for proposals it issued for the project. Without those local utility contracts, the project might not be financially viable.

The rulings lead Spectra to shift its focus, president of US transmission Bill Yardley said. Some electric distribution companies that are legally permitted to have stuck by the project, "but at the same time there's a lot of unmet local distribution company load," he said.

"We're back to the drawing board" on working matters out with other local distribution companies, Yardley said, which "makes this into a 2019 effort when we reformulate it."

Executives expect to make an announcement either later this year or early in 2017 on what contracts it has negotiated for the project.

The company is also considering legislative options, especially considering the fact that governors in the region remain supportive of the project, Yardley said.

Spectra placed the 39mn cf/d Loudon expansion into service in Tennessee on time in September, and the 628mn cf/d Gulf Markets project in the mid-Atlantic and midcontinent came on line in October, earlier than expected. The 330mn cf/d Algonquin Incremental Markets project in New England had an anticipated in service date of 1 November but has not begun full flows yet. That project is expected to be fully in service in the fourth quarter.

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