National Fuel Gas readies to build lateral line

National Fuel Gas is readying to begin construction on its 113mn cf/d (3.2mn m³/d) Line N to Monaca pipeline that will provide operational gas to a Pennsylvania petrochemical plant, the company said today in an earnings call.

The project will expand National Fuel's lateral Line N in Pennsylvania's Beaver and Washington counties in order to serve the new plant Shell is building in Beaver County. The company expects the expansion to begin service in June.

Two of National Fuel's other pipeline expansion projects are proceeding on schedule, with the 198mn cf/d Empire North project in Pennsylvania and New Yorkexpected to start up in the second half of 2020, and the 319mn cf/d FM100 project that is paired with Transco's 800mn cf/d Leidy South project in Pennsylvaniascheduled for late 2021.

The company's 500mn cf/d Northern Access project remains in regulatory limbo after the state of New York in 2017 denied it a key water permit after the US Federal Energy Regulatory Commission (FERC) approved the project. Chief executive Ron Tanski said the company is encouraged by a recent federal court decision in an unrelated casethat determined that state agencies cannot exceed one year in their processing of a water quality certificate.

"We are hoping that this recent federal court decision will allow the FERC to quickly dismiss New York's hearing request," Tanski said.

The production arm of National Fuel plans to continue operating three rigs in Pennsylvania to develop its acreage and grow production at a steady pace. The producer had to curtail output early in the fiscal first quarter ending 31 December by more than 200mn cf/d because of delays in the 1.7 Bcf/d Atlantic Sunrise pipeline project's in-service date. National Fuel has a volume commitment of 190mn cf/d on that line.

National Fuel's output during the quarter rose by 23pc on the year to top 535mn cf/d of natural gas equivalent (cfe/d). The company's fiscal 2019 capital expenditure budget is unchanged at $460-$495mn, with production guidance for the fiscal year at 575mn-630mn cfe/d.