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Expert Commentary: An Oil Price Correction Is Due

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Rover Gas Pipeline Gets Phase 1A Approval

Pipeline

The Federal Energy Regulatory Commission has given the go-ahead to the Rover natural gas pipeline project’s Phase 1A, which will transport gas from Cadiz to the Midwest Hub, near Defiance in Ohio. The hub will serve as a distribution center for 68 percent of the gas Rover transports across the States.

The US$4.2-billion pipeline, still under construction, will eventually have a daily capacity of 3.25 billion cu ft from the Marcellus and Utica shale plays. While the bulk of the gas will be supplied to the domestic market, 32 percent of it will flow to the Union Gas Dawn Storage Hub in Ontario, via Michigan, to be marketed in Canada or redistributed back to the United States.

Earlier this month, Bloomberg’s Naureen S Malik and Catherine Traywick wrote that Rover, which is being built by a unit of Energy Transfer Partners (ETP), is a record holder for environmental violations among all interstate natural gas pipelines built in the country since 2015. It’s worth noting that all these violations were booked after FERC approved the project in February this year.

Rover has accumulated as many as 104 noncompliance incidents, with the second pipeline on the non-compliance list—although significantly shorter—a distant second, with 26 incidents. In Ohio, where Phase 1A is to be launched, Rover has received negative inspection reports about improper disposal of wastewater and damage of protected wetlands after a 50,000-barrel spill of drilling fluid mixed with diesel.

Related: Russia’s Comeback In The LNG Race

In West Virginia, Energy Transfer Partners had to cease and desist working on the pipeline after polluting local streams. Finally, in Washington, FERC ordered a suspension of horizontal drilling on the pipeline following the Ohio spill.

ETP, which gained notoriety with another, much-opposed project, the Dakota Access oil pipeline, has not confirmed or denied the allegations. Separately, the company last month agreed to sell almost a third in the Rover project to Blackstone for US$1.57 billion.

By Irina Slav for Oilprice.com

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  • Naomi on September 01 2017 said:
    This supply will cut the cost of Midwest manufacturing.

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