January 31, 2020 / 3:06 PM / 17 days ago

UPDATE 1-PennEast seeks to build Pennsylvania part of natural gas pipeline first

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Jan 31 (Reuters) - PennEast Pipeline Co LLC said on Friday it has asked federal energy regulators for permission to build the Pennsylvania part of its proposed natural gas pipeline first due to difficulty in gaining approvals in New Jersey.

The company said in a filing with the U.S. Federal Energy Regulatory Commission (FERC) that it expects to be able to complete the Pennsylvania section of the pipeline by November 2021.

As for New Jersey, the company said it was targeting completion of the second phase of the project from Pennsylvania into New Jersey in 2023.

FERC approved PennEast’s request to build the pipeline in January 2018, and the company promptly sued in federal court under the U.S. Natural Gas Act to use the federal government’s eminent domain power to gain access to properties along the route.

New Jersey, however, opposed construction of the pipeline and did not consent to PennEast’s condemnation suits on properties the state owns or in which it has an interest.

The U.S. Court of Appeals for the Third Circuit ruled in September that the company could not use federal eminent domain to condemn land controlled by the state.

That prompted PennEast to ask FERC for a ruling on the issue. FERC on Thursday ruled in favor of PennEast’s view.

After FERC’s ruling, PennEast said it would still take the case to the U.S. Supreme Court because the FERC decision alone cannot trump the Third Circuit decision.

PennEast needs the New Jersey land to build its 120-mile (193-km) pipeline, which is designed to deliver 1.1 billion cubic feet per day of gas from the Marcellus shale formation in Pennsylvania to customers in Pennsylvania and New Jersey.

One billion cubic feet is enough gas to supply about 5 million U.S. homes for one day.

The companies seeking to build the $1 billion PennEast project include units of South Jersey Industries Inc, New Jersey Resources Corp (NJR), Southern Co, Enbridge Inc and UGI Corp.

Companies with contracts to use the project include units of NJR, SJI, Southern, Public Service Enterprise Group Inc and Consolidated Edison Inc.

PennEast is not the only gas pipeline facing state opposition in the U.S. Northeast. Two of Williams Cos Inc’s proposed pipelines face state opposition, including the Constitution project in New York and the Northeast Supply Enhancement project in New Jersey.

Reporting by Scott DiSavino Editing by Chizu Nomiyama and Paul Simao

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