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FERC halts new drilling for Rover gas line

10 May 2017 20:34 (+01:00 GMT)
FERC halts new drilling for Rover gas line

Washington, 10 May (Argus) — The US Federal Energy Regulatory Commission (FERC) today partially halted the construction for the 3.1 Bcf/d (89mn m³/d) Rover natural gas pipeline in the US northeast in response to an earlier spill of drilling fluids.

FERC prohibited the developer of the $4.2bn pipeline from starting horizontal directional drilling in new areas until it meets certain conditions and receives further approval. FERC said the action was appropriate because its staff had "serious concerns" about the magnitude and duration of the spill, a lack of clarity about its cause and the potential for future problems.

"A stoppage of additional drilling is warranted to facilitate a review of Rover's efforts to search for and locate any potential releases," FERC said in a letter sent today to developer Energy Transfer Partners

The company did not respond to requests for comment.

The 511-mile (822km) pipeline would transport Marcellus and Utica shale gas from processing plants in West Virginia, Pennsylvania and Ohio to a natural gas hub in western Ohio for eventual delivery into Michigan and Canada.

The Rover pipeline last month reported a spill of 2mn USG of drilling fluids — which consist primarily of clay — as it was drilling horizontally near the Tuscarawas river in Ohio. FERC said its staff found that based on a review of records, construction crews continued drilling over three weeks even though drilling fluids were "absent or intermittent" most of the time, which could be an indication of an accidental release.

FERC today ordered the pipeline to "immediately" obtain third-party contractor proposals to analyze its drilling activities related to the Ohio drilling fluids spill. Construction crews can continue horizontal drilling they have already started, FERC said, but they cannot drill on four segments of the pipeline where drilling has yet to begin.

Energy Transfer has been on tight construction deadlines to complete the Rover pipeline in time for the winter heating season. The company initially expected the first phase of the project to be in service in the fourth quarter of 2016, but a longer regulatory approval process delayed the start of construction.

On a 4 May earnings call Energy Transfer's chief financial officer Thomas Long said the company remained on schedule to finish the pipeline by November. It remains unclear if the prohibition on new horizontal drilling could push back that targeted in-service date.

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