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FERC approves Dominion to move gathering assets to new midstream company


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FERC approves Dominion to move gathering assets to new midstream company

FERC approved DominionResources Inc.'s reorganization of natural gas gathering andprocessing facilities to streamline the company's Appalachian assets.

The April 21 FERC order granted authorization for the abandonmentof Dominion Transmission Inc.'sfacilities by sale to Dominion Gathering & Processing Inc.

"We find that [Dominion Transmission]'s abandonmentwill have no impact on [its] existing gas quality obligations," FERC wrote.

Dominion Transmission submitted an with FERC for theabandonment on Oct. 1, 2015, with an originally proposed transfer date of April1, 2016.

Dominion Resources formed Dominion Gathering to own andoperate all of its Appalachian gathering and processing facilities as aseparate midstream company dedicated to those services. DominionTransmission said it does not need the gathering and product extractionfacilities to provide its jurisdictional transportation and storage services.Dominion Transmission has proposed to sell all these facilities for nearly $434.0million, split between about $200.1 million worth of gathering facilities andabout $233.8 million for the processing infrastructure.

Through the abandonment, Dominion Gathering will acquireinfrastructure and delivery points, including approximately 2,150 miles of two-to 24-inch-diameter pipeline in wet gathering systems in West Virginia; about735 miles of two- to 12-inch-diameter pipeline in dry gathering systems in WestVirginia; an estimated 350 miles of two- to 10-inch-diameter pipeline in drygathering systems in Pennsylvania; and 27 compressor stations with 33compressor units on the West Virginia gathering systems. Dominion Gatheringwill also get processing plants in West Virginia.

The gathering systems that Dominion Transmission willabandon were originally developed by its predecessor companies decades ago inorder to provide Appalachian gas services through a bundled merchant function.

"However, over time, these services have increasinglybeen provided by non-jurisdictional entities," FERC wrote, referring tocompanies outside of the jurisdiction of the Natural Gas Act, "andDominion seeks to follow that trend."

Dominion Transmission is a wholly owned subsidiary ofDominion Gas Holdings LLCand a subsidiary of Dominion Resources. Dominion Gathering will also operate asa subsidiary of Dominion Gas. (CP16-1)