New Castle News

Closer Look

April 30, 2014

Pipeline on hold includes Lawrence, Mercer area

NEW CASTLE — A pipeline for liquid natural gas, intended to traverse Mercer and Lawrence counties, is on hold.

Plans for the multi-state conduit project, known as the Bluegrass pipeline, have been suspended in their early stages, according to information provided this week by Williams and Boardwalk Pipeline Partners.

Sara Delgado, senior communications specialist with Williams/Bluegrass Pipeline, said Tuesday no actual digging or construction work had begun on the project in this area. Rather, the company was in the process of easement acquisition to put together the right-of-way route. Environmental studies, analyses and engineering also were under way, but “It’s all been suspended for now.”

“We were needing customer commitments to move the project forward,” Delgado said. Those customers are producers of natural gas in Utica and Marcellus areas.

While gas line digging is going on in parts of western Lawrence County, none of it is related to the Bluegrass Pipeline project, she said, rather, those most likely are gathering lines that well producers are putting in.

“That activity is not related to our project.”

As far as the length of time for the suspension, she noted, “We’re having ongoing discussions with the customers to determine their needs and timing. There is no set time frame right now.”

The Bluegrass project involves construction of liquid gas transmission lines from producing areas in Pennsylvania, Ohio and West Virginia to an interconnect with Boardwalk’s Texas Gas transmission system in Hardinsburg, Ky.

The line was to originate in Grove City and be built southwest through the Wilmington and Pulaski township areas, then North Beaver Township,  into a tip of Mahoning County in Ohio, then southwest through Ohio into Kentucky.

The pipeline was being designed to connect supply from the Marcellus and Utica shale gas areas in northeastern United States to growing petrochemical and export markets on the Gulf Coast, according to the project’s online site, www.bluegrasspipeline.com.

The project also was intended to connect the natural gas liquids supply with developing petrochemical market in the Northeast.

Phase one of the Bluegrass Pipeline would have provided producers with 200,000 barrels per day of mixed natural gas liquids take-away capacity in Ohio, West Virginia and Pennsylvania. Its second phase would increase capacity to 400,0000 barrels per day, by adding additional liquids pumping capacity, according to an online fact sheet the company had published previously.

Before the recent suspension, the project initially was to have been completed and be in service by late next year.

In an open letter to project supporters this week, Bill Lawson and Michael McMahon, partners in the Bluegrass Pipeline, wrote that “recently, we reached a point in the development of the project where we needed to make some important decisions about timing and additional investment. While data show there will soon be a need for a large-scale solution like Bluegrass Pipeline to meet market needs, potential customers to date have so far chosen to focus on local solutions.”

The partners say they are continuing to pursue support for the project, but are not investing additional money right now.

“In short, Bluegrass Pipeline appears to be a project that’s ahead of its time.”

The need to move natural gas liquids from the natural gas production in the Utica and Marcellus shale areas to markets is an important component for enabling manufacturing, they wrote.

“We will continue to have discussions with potential customers to determine their needs, the needs of the market and our project,” the letter said.

Dan Brockett, a member of Penn State Extension’s Marcellus Education Team, commented Tuesday that “at some point in Lawrence County and in the region, the takeaway capacity for natural gas liquids is going to be developed. It’s just a matter of where, and by whom.”

(Email: dwachter@ncnewsonline.com)

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