Opportunities exist for a further expansion of the Millennium Pipeline Co. LLC natural gas system and the revival of Access Northeast despite regulatory and environmental hurdles to adding capacity to move Appalachian Basin gas to downstream markets, senior officials with the developers said.
The comments, made June 12 during the LDC Gas Forum Northeast in Boston, reflect the confidence midstream operators have that the traditionally pipeline-constrained region can continue to be a growth driver for the sector.
"We all need to take a more proactive approach to messaging," Richard Gardner, senior vice president of business development for Millennium, told attendees at the conference. Millennium serves as a significant outlet for production from long-constrained northeast Pennsylvania, primarily delivering gas to downstream markets in New York and Boston.
The pipeline receives approximately 1 Bcf/d of production from northeastern Pennsylvania. In the past winter, more than 75% of that gas ultimately made it to an interconnect with Algonquin for final delivery into the New England markets, data compiled by S&P Global Platts Analytics shows.
Northeastern Pennsylvania production receipts that exit the region via Millennium have few additional options to make it to demand markets. Maintenance earlier in spring cut production receipts onto Millennium to zero for several days, bringing down total northeastern Pennsylvania production by nearly the same amount, Platts Analytics data shows.
Millennium, owned by TransCanada Corp.'s Columbia Gas Transmission LLC and by National Grid USA and DTE Energy Co., is building its 223,000-Dth/d Eastern System Upgrade in New York, where the project has been met with strong opposition. The operator is targeting a Nov. 1 startup, and Gardner said at the conference that "there is no reason for us to believe that in-service date won't be met."
Gardner also said there is no reason for Millennium to stop at the Eastern System Upgrade project. "I think, yes, we can build something else," he said. "It will be a market pull, not a supply push. I think that's out there. I think there's opportunity. I think it will be small-scale."
Gardner said the capacity of a potential further expansion could be 150,000 Dth/d, and such a project could find shipper support by being built in conjunction with a wind farm. He would not discuss a possible location, though he suggested the operator would not shy away from New York. "If I went to New York regulators and say, 'I have a project concept, and we don't need to do a lot of looping ... I think it goes a long way to overcoming some of the challenges in New York," Gardner said.
Hope remains for Access Northeast
Access Northeast, meanwhile, has stalled, but the developers are not giving up on the project to serve New England. Erin Petkovich, director of Northeast business development for Enbridge Inc., said at the conference that the pipeline operator and its partners Eversource Energy and National Grid PLC "remain committed to advance a solution for New England."
Petkovich said there are several potential paths forward for Access Northeast. "We're working on a policy level to see if we can develop a uniform New England policy," she said. "We're also working with the market."
In a related move, Eversource on Monday notified the New Hampshire Public Utilities Commission that it will submit an updated proposal to replace its agreement to purchase capacity on Access Northeast. The high court there recently reversed the PUC's 2016 dismissal of the original agreement and remanded the issue to the PUC.
Despite the proximity of the Marcellus and Utica shale plays, New England imports significant volumes of gas from Canada via pipeline and from other countries via LNG tanker to meet peak demand. Market experts blame insufficient west-to-east and south-to-north pipeline capacity to transport gas there from producers in Pennsylvania and West Virginia. "We are actively developing there," Petkovich said of Access Northeast. "We feel like the need is there. Hopefully, we will have some more tangible events to share at this event next year."
Harry Weber is a reporter for S&P Global Platts, which, like S&P Global Market Intelligence is owned by S&P Global Inc. Platts' John McManus contributed to this article.
