Resource report filed for Atlantic Bridge gas pipeline project in Northeast U.S.

Algonquin Gas Transmission LLC and Maritimes & Northeast Pipeline LLC on March 23 filed a resource report at the Federal Energy Regulatory Commission for the Atlantic Bridge Project, which will add gas pipeline capacity into New England.

The project will create additional capacity between a receipt point on Algonquin’s system at Mahwah in Bergen County, New Jersey, and various delivery points on the Algonquin system, including at Beverly, Massachusetts, for further transportation and deliveries on the Canadian Maritimes system. The project capacity of up to 222,000 dekatherms per day (Dth/d) will be created through pipeline take-up and relay and loop facilities and additional compression on Algonquin’s system.

South-to-north transportation on Maritimes will be provided through minor modifications to existing facilities to provide bi-directional flow on the existing Maritimes system.

The target in-service date for the Atlantic Bridge Project is Nov. 1, 2017.

FERC will conduct a full review of the Atlantic Bridge Project under its regulations in compliance with the Natural Gas Act and the National Environmental Policy Act. On Jan. 30, the applicants requested approval from the FERC to initiate the Pre-filing review process for the Atlantic Bridge Project and the FERC issued its approval of that request on Feb. 20.

“Demand is growing in the Northeast for increased utilization of natural gas – an economic source of fuel that is domestically produced, clean-burning and efficient,” said the resource report. “Demand in this region is expected to continue to increase as more homes and commercial buildings convert heating units and appliances to natural gas and as more natural gas is used for industrial purposes. In addition, expanded access to the Northeast natural gas markets is critical to alleviate capacity constraints that have resulted in natural gas prices which are higher historically than markets elsewhere in North America.”

The applicants held an open season for the Atlantic Bridge Project in February-March 2014, and held a reverse open season from Jan. 16 through Jan. 26 of this year. As a result of the open seasons, the applicants have executed precedent agreements with nine shippers, including five local distribution companies, three manufacturing companies and a municipal utility for firm transportation.

The project shippers to date are Heritage Gas Ltd., Maine Natural Gas Co., New England Gas Co. d/b/a Liberty Utilities, NSTAR Gas Co. d/b/a Eversource Energy, Summit Natural Gas of Maine, Irving Oil Terminal Operations Inc., J.D. Irving Ltd., Woodland Pulp LLC, and Norwich Public Utilities. In addition, Algonquin is negotiating with other potential shippers for the remaining project capacity.

ICF International projects that the demand for natural gas in New England will increase by 13.5% by 2020, the report noted. Similarly, a recent report prepared for the Massachusetts Department of Energy Resources found that, from 2015 through 2019, electric generators will have insufficient supply of natural gas, which results in spiking natural gas prices. Scarcity-driven high natural gas prices will force economic curtailment of natural gas-fired generators in favor of oil-fired units.

Critical to this result is the assumption that winter peak hour gas shortages cannot be addressed using known measures (e.g. demand response or the addition of new natural gas pipeline) in years 2015 through 2019 and, as a result, gas prices are expected to reflect an out-of-balance market in those years. According to the report, the electric sector will respond to these high prices by shifting dispatch from gas to oil generation in the peak hour, reducing reliance on natural gas.4 In order to alleviate these shortages by 2020, the report determines that an additional 600 to 800 million cubic feet of additional pipeline capacity will be required.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.