Inergy Midstream, L.P. (NYSE:NRGM), a subsidiary of Inergy, L.P. (NYSE:NRGY), yesterday announced plans to jointly market and develop a new interstate natural gas pipeline known as the Commonwealth Pipeline with affiliates of UGI Corporation (“UGI”) and WGL Holdings, Inc. (“WGL”). The proposed 200 mile, 30-inch pipeline is expected to transport at least 800,000 dekatherms per day of natural gas when it is placed into service; and affiliates of UGI and WGL are expected to execute precedent agreements to become anchor shippers on the new pipeline. The parties anticipate placing the new pipeline into service in 2015.
The Commonwealth Pipeline will extend from the southern terminus of Inergy Midstream’s MARC I pipeline in Lycoming County, Pennsylvania, through UGI’s utility service areas in central and eastern Pennsylvania to a point of interconnection with WGL’s gas distribution system near Rockville, Maryland. The pipeline will connect attractive demand centers in the Mid-Atlantic region, including Washington D.C., Baltimore, and Philadelphia to abundant and reliable supplies of natural gas production from across Pennsylvania while providing a more cost-effective transportation path versus traditional routes.
“We are pleased to be working with UGI and WGL to develop this significant infrastructure project, which will provide direct access to new demand markets for gas producers,” said Bill Moler, Senior Vice President and COO of Inergy Midstream. “Gas production in the Northern tier of Pennsylvania has been limited by the lack of take-away capacity in existing interstate pipelines, most of which currently serves markets in the Northeast. The Commonwealth Pipeline is expected to provide much-needed transportation capacity to desirable new and growing demand markets in the Mid-Atlantic.”
John Sherman, President and CEO of Inergy Midstream, added, “This project is a natural extension of Inergy Midstream’s storage and transportation platform in the Northeast. We are committed to developing the critical infrastructure that natural gas customers desire. For our investors, this project adds to our plans for high quality, fee-based cash flows that underpin the stability and growth of our cash earnings.”
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