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U.S. Approves $3.2B Appalachian Natural Gas Pipeline

TransCanada said on Friday that the U.S. Federal Energy Regulatory Commission (FERC) had approved the full in-service of the Mountaineer XPress natural gas pipeline project, which will help link the Appalachian basin’s natural gas supplies and growing markets in the U.S. and beyond.

The Mountaineer XPress (MXP) project includes a 170-mile natural gas pipeline in West Virginia that will increase natural gas capacity by 2.7 billion cubic feet per day and together with related infrastructure—new compressor stations and modifications to existing compressor stations—represents a total investment of US$3.2 billion.

The approval of the full in-service of Mountaineer XPress will allow TransCanada to start partial in-service of its Gulf XPress Project, a network of seven new compressor stations in Kentucky, Tennessee, and Mississippi, which will significantly increase the reach of low-cost, U.S.-produced natural gas from the Appalachian Basin. Investment in Gulf XPress is some US$600 million, according to TransCanada.

The start of the Gulf XPress project includes placing into service four new compressor stations located in Kentucky, Tennessee, and Mississippi, which are expected to provide additional capacity of 530,000 million cubic feet of natural gas per day on the Columbia Gulf Transmission System. Gulf XPress is expected to begin full service in the coming weeks, TransCanada said in a statement.

Both the Gulf XPress and the Mountaineer XPress are underpinned by long-term contracts with customers, the Canadian pipeline operator noted.

“Mountaineer XPress and Gulf XPress are extremely important to TransCanada as they provide much-needed takeaway capacity for our customers, while also growing our extensive footprint in the Appalachian Basin,” TransCanada President and CEO Russ Girling said.

In mid-February, TransCanada said it had revised upward its project costs for the Mountaineer XPress project to US$3.2 billion, due to delays in regulatory approvals from FERC and other agencies, higher contractor costs due to unusually high demand for construction resources in the region, inclement weather during construction, and changes in contractor work plans to mitigate delays. 

By Tsvetana Paraskova for Oilprice.com

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