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US FERC rejects Rover gas pipeline horizontal drilling request

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US FERC rejects Rover gas pipeline horizontal drilling request

Houston — US regulators have rejected a request by Energy Transfer Partners' Rover Pipeline to resume horizontal directional drilling at two key sites, putting further pressure on the operator's efforts to meet its in-service target of July 1 for the first phase of a 3.25 Bcf/d natural gas project being closely watched by Northeast and downstream markets.

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Following leaks of drilling fluids into Ohio wetlands in April, including one during horizontal directional drilling at the Tuscarawas River, the Federal Energy Regulatory Commission ordered Rover earlier in May not to conduct any more drilling of that type in some areas where it has not started work.

ETP then asked to be allowed to continue the drilling at two sites where the activity was already underway, one in Ohio and the other in West Virginia. It said halting excavation there could cause further environmental problems and expressed concerns about the project being delayed.



FERC said in a letter to Rover on Thursday that the agency must complete its review before allowing the horizontal directional drilling activities to resume. For now, it granted the operator permission to remove the drill stem from the borehole at the West Virginia location and install a casing to prevent the hole from collapsing.

"Authorization to resume drilling activities in conjunction with the Rover Pipeline Project is contingent upon commission staff's consideration of the independent third-party contractor's analysis of all drilling activity at the Tuscarawas River HDD and the independent third-party contractor's recommended plan detailing the measures that Rover can put into place to ensure that the same level of impacts do not occur on the other HDDs during project construction," FERC said in the letter.

Two company representatives did not immediately respond to a request for comment.

Related Snapshot video: FERC quorum concerns increase uncertainty for gas pipeline projects, rates

The 500-mile Rover pipeline will impact upstream supply fundamentals in the Northeast and downstream gas markets in the Midwest and Southeast US, as well as the Dawn, Ontario, hub.

Producers have been eagerly awaiting new infrastructure, to give them extra capacity to move their output out of the pipeline constrained Marcellus and Utica shale basins.

With the possibility of a Rover delay, some producers have been hedging their production and considering alternative pipelines for moving some of their gas until Rover enters service.

Rover's most recent statements have stuck to the July in-service date for the first phase of the project and November for the second phase.

Environmental disputes and historic preservation concerns have dogged the project for months. A large coalition of environmentalists is pressing the commission to halt work entirely, saying the recent spills exposed flaws in FERC's oversight.

Related: Find more content about Trump's administration in our news and analysis feature.

--Harry Weber, harry.weber@spglobal.com

--John McManus, john.mcmanus@spglobal.com

--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com