Equitrans LP, following up on a pre-filing process begun earlier this year, applied Oct. 27 at the Federal Energy Regulatory Commission for a certificate of public convenience and necessity to construct, own, and operate approximately 7.87 miles of natural gas pipeline in Allegheny, Washington, and Greene counties, Pennsylvania, and Wetzel County, West Virginia.
The application also covers: a new 31,300 nominal horsepower (HP) compressor station (the “Redhook Compressor Station”) in Greene County; a new interconnect in Wetzel County with Mountain Valley Pipeline LLC’s planned pipeline system (called the “Webster Interconnect”); and ancillary facilities. Equitrans also seeks authority to abandon an existing 4,800 HP compressor station in Greene County (the “Pratt Compressor Station”) following the construction of the new Redhook Compressor Station. The proposed facilities and abandonment comprise the Equitrans Expansion Project.
The authorizations requested will allow Equitrans to provide for an additional 600,000 dekatherms per day (Dth/d) of north-south firm capacity on the Equitrans system. The creation of this expansion capacity will provide shippers with additional flexibility to transport natural gas produced in the central Appalachian Basin to meet the growing demand by local distribution companies, industrial users, and power generation facilities located in the local, northeastern, Mid-Atlantic and southeastern regions of the United States.
In addition to providing shippers with capacity to Mountain Valley, the project will provide additional pipeline capacity to existing interconnects with Texas Eastern Transmission LP, Dominion Transmission Inc. and Columbia Gas Transmission LLC.
Equitrans proposes to commence construction of the project in December 2016, so it is asking for FERC approval by no later than Oct. 15, 2016.
Equitrans is currently owned: 97.25% by Equitrans Investments LLC, a subsidiary of EQT Midstream Partners LP; and 2.75% by Equitrans Services LLC, also a subsidiary of EQT Midstream Partners.
On April 1, Equitrans requested commission authorization to initiate pre-filing procedures for this project. During the pre-filing process, Equitrans engaged in a collaborative process with commission staff, landowners, state and local agencies, and other interested stakeholders to provide input and consultation.
Equitrans conducted a non-binding open season for firm transportation from March 5 through March 20 to provide all market participants the opportunity to identify transmission capacity needs at existing or new receipt points on Equitrans’ system, with potential deliveries to existing and future interconnects, including interconnects with Texas Eastern, Dominion, and Mountain Valley. Following the open seasons, Equitrans continued to market its system expansion and began to negotiate with prospective shippers.
Equitrans offered all potential customers the opportunity to become an anchor shipper or a standard shipper for the project through its open season process. Ultimately, Equitrans executed a precedent agreement for a long-term negotiated rate service agreement with a shipper for 400,000 Dth/d of firm transportation service on the project. Equitrans has sized the project based on the projections for the rapid and continued development of production in the central Appalachian Basin. Equitrans continues to market the unsubscribed capacity that remains. Equitrans will bear the risk of recovering the project’s costs if it is not fully subscribed.
Equitrans plans to place certain project facilities in service during December 2017 (pipelines and interconnects) and April 2018 (Redhook Compressor Station), and to complete the project, including the decommissioning of the Pratt Compressor Station, by no later than December 2018. The estimated total cost of the project, including contingency, overheads, and Allowance for Funds Used During Construction, will be approximately $172 million.