Inergy Midstream, L.P. (NYSE: NRGM); UGI Energy Services, Inc., a wholly-owned subsidiary of UGI Corporation (NYSE: UGI); and Capitol Energy Ventures Corp., a wholly-owned subsidiary of WGL Holdings, Inc. (NYSE: WGL), today announced that UGI Energy Services, Inc. and Capitol Energy Ventures Corp. have each executed binding precedent agreements for firm transportation capacity on the Commonwealth Pipeline. These anchor shippers have agreed to purchase firm transportation capacity on the Commonwealth Pipeline for a ten-year period at negotiated rates, upon and subject to the terms and conditions set forth in the precedent agreements.
The Commonwealth Pipeline will provide a direct, cost-effective path for bringing natural gas produced in the Marcellus and Utica Shale plays to growing natural gas markets in central and southeastern Pennsylvania and the greater Mid-Atlantic region. The proposed interstate pipeline will consist initially of approximately 120 miles of 30-inch pipeline extending from the southern terminus of the Inergy Midstream’s MARC I Pipeline in Lycoming County, Pennsylvania, to several points of interconnection in southeastern Pennsylvania with other interstate pipelines, including NiSource Gas Transmission and Storage, Texas Eastern Transmission Company, Transco Pipeline, and Eastern Shore Natural Gas Company. As shown on the map below, the Commonwealth Pipeline is also expected to connect with UGI Energy Service’s natural gas liquefaction, vaporization, and storage facility near Temple, Pennsylvania, and to run near or connect with multiple natural gas distribution systems in southeastern Pennsylvania.
The proposed interstate pipeline project is expected to have an initial capacity of 800,000 dekatherms of natural gas per day. The project sponsors have commenced field work, including requesting survey permission from landowners, and expect to request authorization from the Federal Energy Regulatory Commission (“FERC”) later this year to use its pre-filing procedures. The project sponsors anticipate filing with the FERC in the first half of 2013 a Section 7(c) application under the Natural Gas Act for a Certificate of Public Convenience and Necessity, and placing the Commonwealth Pipeline into commercial service in 2015. Project representatives are working with prospective shippers and expect to execute additional precedent agreements over the next several weeks to further support the Project’s construction and the filing of applications for regulatory approvals.