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On eve of full service, Nexus gas pipeline developers already plotting expansion

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On eve of full service, Nexus gas pipeline developers already plotting expansion

Enbridge Inc. and DTE Energy Co. are still looking for final customer commitments for their 1.5-Bcf/d Nexus natural gas pipeline across Ohio, but they are already planning expansions.

Construction is almost complete on the project, and the partners behind Nexus Gas Transmission LLC have said they expect to put the project in full service in the third quarter.

A portion of a connected project, the Texas Eastern Appalachian Lease project, on Aug. 13 received federal authorization for service.

An Enbridge spokesman said the developers designed the Nexus route based on projected growth in gas demand in the Great Lakes region, not just to justify the current scope of the pipeline but to put it in position to grow.

"The region to be served by the Nexus project is in the midst of a significant change in natural gas supply and demand dynamics," said Adam Parker, an Enbridge spokesman and manager of stakeholder outreach for the pipeline. "Due to recent environmental policies and a focus on greater reliability, the region is experiencing significant pressure to invest in natural-gas-fired electric generation."

"Nexus has compression expansion opportunities available as future market need develops," Parker wrote in an email.

Project facilities include almost 260 miles of 36-inch-diameter greenfield pipeline and four new compressor stations on a route that runs to Michigan from connections to the Marcellus and Utica shales in eastern Ohio. Through other pipelines, Nexus gas can travel farther, to a major hub in Ontario. The Federal Energy Regulatory Commission approved the project, estimated to cost about $2 billion in its Natural Gas Act certificate application, in August 2017. The developers began construction in October 2017.

The pipeline is designed to transport up to 1.5 Bcf/d of gas to meet current and future demand for the fuel. Parker said the current contracted capacity is about 60% of total transportation capacity and the pipeline partners continue to negotiate with interested parties. In an earnings call Aug. 3, Enbridge executives said Nexus was drawing strong interest for facilities that would allow customers to connect to the pipeline. Parker pointed out that Nexus is anchored by commitments from eastern Canadian and Midwestern gas utilities, as well as Appalachian producers.

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In Ohio, Nexus has signed 14 connection agreements with LDCs, industrial facilities and power generators, representing an incremental load across northern Ohio of up to approximately 2.3 Bcf/d, Parker said. In one instance, Nexus and Columbia Gas of Ohio Inc. reached a binding agreement for long-term firm gas transportation service of up to 50,000 Dth/d. The gas would move from receipt points at two planned interconnections between Nexus and Enbridge's Texas Eastern Transmission LP system in Ohio and Pennsylvania and a planned interconnection with Columbia Gas Transmission LLC in Sandusky County, Ohio, with access to delivery points in Medina County, Ohio.

"The pipeline is located in an area with some of the best reserves in North America, and the path provides an opportunity to secure long-term capacity from LDCs and industrial load centers along this path," Parker said.

Asked about Enbridge and DTE joint ventures beyond the pipeline, Parker said Enbridge has options for projects within its core energy businesses, which include gas distribution and wind and solar energy, in addition to gas and liquids transportation.

The Nexus project did not run into the construction problems of Energy Transfer Partners LP's Rover Pipeline LLC project. The Rover pipeline, which like Nexus is almost ready for full service and also crosses Ohio, attracted the attention of the Ohio Environmental Protection Agency and FERC after the destruction of a building with historic value and a series of driling fluid spills in wetlands.

The Nexus developers moved carefully before and during construction, said Parker, whose position put him in the middle of communication efforts on the project. Nexus has worked with communities on the route and has contributed more than $750,000 in community grant funding.

"For nearly four years, Nexus representatives have communicated with landowners along the pipeline route in order to develop a balanced approach to designing, constructing and operating the pipeline," Parker said. "Great effort has been taken to address individual landowner concerns and minimize disruption during the construction process. We strive to understand issues from the landowners' perspective and accommodate reasonable requests when possible."