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National Fuel pushes back Northern Access service, citing regulatory delays

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National Fuel pushes back Northern Access service, citing regulatory delays

National Fuel Gas Co. pushed back the in-service date of its Northern Access gas pipeline expansion to early 2018 from the previous schedule of November 2017, attributed to delays in obtaining regulatory approvals.

The regulatory delays, among them a FERC certificate issuance, caused pipeline proponents National Fuel Gas Supply Corp. and Empire Pipeline Inc. to hold off on certain development activities along sections of the route ahead of environmental protection periods from April 1 to the end of July, according to a Jan. 25 news release.

As a result, the New York State Department of Environmental Conservation on Jan. 23 agreed to extend its deadline for granting permits including a water quality certification to April 7 from March 1. The regulator has determined that National Fuel Gas Supply and Empire have submitted complete permit applications, allowing them to resume the permitting process. The notice of complete application is to be published Jan. 25.

"Progress is slower than we had originally anticipated, as a number of energy projects in the northeast U.S. have faced similar permitting delays," Ronald Tanski, president and CEO of National Fuel, said in the statement.

The Northern Access project, which would expand transportation capacity on the pipeline from the Marcellus Shale by 350,000 Dth/d, received a positive environmental review from FERC staff in July 2016.

Production report

National Fuel's E&P subsidiary Seneca Resources Corp. posted net production volumes of 44.9 Bcfe for the quarter ended Dec. 31, 2016, a 6.8-Bcfe, or 18%, increase over the prior-year quarter. The quarter was the first quarter of the company's fiscal year.

Seneca produced 40.6 Bcf of natural gas in the fiscal first quarter, representing a 7-Bcf, or 21%, increase compared to the prior-year quarter. Oil production saw a 27,000-barrel, or 4%, decrease year over year, to 721,000 bbl.

The increase in gas production also resulted in higher volumes on Seneca's gathering systems. The gathering segment delivered 50.6 Bcf in the fiscal first quarter, rising 16.8 Bcf, or 50%, from the same quarter a year earlier.