Nexus pipeline project advances at FERC

OREANDA-NEWS. July 14, 2016. The US Federal Energy Regulatory Commission (FERC) has issued a favorable draft environmental impact statement for Spectra Energy's planned 1.5 Bcf/d (42mn m/d) Nexus pipeline and the related expansion of the Texas Eastern Transmission system.

FERC staff concluded last week that the proposed projects would result in some adverse environmental impacts. But those impacts would be reduced to less-than-significant levels, if proposed mitigation measures are followed.

Pipeline company Spectra Energy and gas and electric utility DTE Energy are the lead developers of the 256-mile (412km) greenfield pipeline project that would connect markets in northern Ohio, southeastern Michigan and Ontario, Canada with supplies from the Marcellus and Utica shales. The associated Texas Eastern Appalachian Lease project will be able to deliver about 920mn cf/d from Texas Eastern into Nexus through an interconnect at Columbiana County, Ohio.

Large greenfield pipelines that provide an outlet for supplies from the northeast have been in the spotlight after other high-profile projects were stalled or cancelled. State regulators in New York denied a key water permit for the 628mn cf/d Constitution pipeline, bringing the development of the \\$748mn project to a standstill.

Kinder Morgan in May withdrew its application for its \\$3.3bn, 1.3 Bcf/d greenfield pipeline known as Northeast Energy Direct because of a lack of customer interest.

Nexus has received long-term contracts for a total of about 806mn cf/d, just over half of the planned capacity, according to a FERC filing. DTE Gas has committed to up to 150mn cf/d on the pipeline.

Nexus has met with some opposition in Michigan. State attorney general Bill Schuette contends that DTE did not explore all of the options for sourcing low-cost gas for its customers, who will bear some of the costs associated with tapping into the Nexus pipeline.

But DTE has not asked state regulators to pass along cost of connecting Nexus, and at the time the utility signed on to build the project, there were no other pipeline options for gas, Nexus said. the pipeline has received support from the Michigan Public Service commission staff, Michigan Economic Development Corp and the Michigan Agency for Energy.

Nexus project developers have said they expect FERC's final environmental impact statement in November and to receive a certificate of Public Convenience and Necessity during the first quarter of 2017, allowing enough time to finish the project by November 2017.

The project will also require numerous approvals from other federal and state agencies and from regulators in Canada.

The Ontario Energy Board in December approved applications from Union Gas Limited and Enbridge Gas Distribution for a 15-year contracts to move natural gas into the Union Gas Dawn hub on the Nexus system.