The Commonwealth Pipeline will extend from the southern terminus of Inergy Midstream’s MARC I pipeline in Lycoming County, Pennsylvania, through UGI’s utility service areas in central and eastern Pennsylvania to a point of interconnection with WGL’s gas distribution system near Rockville, Maryland.
The proposed pipeline is expected to transport at least 800,000 dekatherms/d of natural gas when it is placed into service, and affiliates of UGI and WGL are expected to execute precedent agreements to become anchor shippers on the new pipeline. The parties anticipate placing the new pipeline into service in 2015.
Inergy Midstream Senior Vice President and Chief Operating Officer Bill Moler said “Gas production in the northern tier of Pennsylvania has been limited by the lack of take-away capacity in existing interstate pipelines, most of which currently serve markets in the Northeast. The Commonwealth Pipeline is expected to provide much-needed transportation capacity to desirable new and growing demand markets in the Mid-Atlantic.”
The pipeline is expected to cross and interconnect with a number of interstate pipelines along its route, providing customers with greater supply diversity while providing producers direct access to expanding markets that are currently served only through legacy interstate pipelines.
Upon completion of the MARC I and the Commonwealth Pipeline, shippers will have the ability to move volumes bi-directionally to or from multiple pipelines – including Dominion Transmission, Tennessee Gas Pipeline, Millennium Pipeline, Transco, and TETCO – across an interconnected platform of assets to markets in the Northeast and Mid-Atlantic.
The sponsors expect to own equal equity interests in the project company formed to own the Commonwealth Pipeline. The plans are for Inergy Midstream to construct and to operate the pipeline, which is expected to cost approximately $US1 billion and be funded equally among the sponsors.
A non-binding open season will be announced later this month for shippers interested in acquiring capacity on the proposed Commonwealth Pipeline.