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July 31 (Reuters) - Kinder Morgan Energy Partners LP said natural gas distribution companies in New England have agreed to buy firm gas on the U.S. energy company's proposed new pipeline into the region.
A shortage of gas pipelines into New England forced energy firms there to pay record prices for gas supplies to heat homes and run a growing number of gas-fired power plants in the region during the recent unusually long and cold winter.
The New England utilities agreed to transport about 0.5 billion cubic feet per day of long-term firm transportation on the proposed Tennessee Gas Pipeline Co (TGP) Northeast Energy Direct Project, Kinder Morgan said in a release on Wednesday.
Included in the utility group are UIL Holdings Corp's Berkshire Gas Co, Connecticut Natural Gas Corp and Southern Connecticut Gas Co, NiSource Inc's Columbia Gas of Massachusetts, Algonquin Power & Utilities Corp's Liberty Utilities Corp, National Grid Plc, and three other utilities.
Kinder said it was continuing negotiations with additional customers and expected to announce agreements soon.
"Multiple studies continue to suggest there is a need for up to 2 billion cubic feet per day of new pipeline capacity into New England and neighboring markets," Kinder Morgan Natural Gas Pipelines East Region President Kimberly Watson said in the release.
The Northeast Energy Direct project can provide up to 2.2 bcf of gas per day depending on final customer commitments, Kinder Morgan said.
The project, which will connect New England to the Marcellus shale gas fields in Pennsylvania, will include new pipelines and equipment in Pennsylvania, New York, Massachusetts, Connecticut, New Hampshire and Rhode Island.
Kinder said it plans to begin the pre-filing process with the Federal Energy Regulatory Commission in September 2014, with the project expected to begin service in November 2018, subject to regulatory approvals.
The Tennessee Gas Pipeline is a 13,900-mile (22,370-kilometer) pipeline that transports gas from Louisiana, the Gulf of Mexico and South Texas to the northeastern United States, including New York City and Boston. (Reporting by Scott DiSavino; Editing by Paul Simao)