PennEast Pipeline, the midstream company focused on the Marcellus shale; announced this Thursday it still expects to complete the infamous Pennsylvania-New Jersey pipeline, by 2022. Even though the company has tossed the option of acquiring the rights of way for the $1,2 billion project; due to regulatory hurdles.
Firstly, the company said that the first phase of the natural gas pipeline could be completed by 20222; and the second phase, the one that requires the acquisition of the rights of way; as it will run from Pennsylvania to New Jersey, could be done by 2023.
Secondly, as we have reported previously, the Pennsylvania pipeline is just one of other midstream projects delayed and stalled; due to environmental concerns and opposition from groups; in this case, from Northeastern states as the region transitions from fossil fuels to cleaner forms of power, like wind and solar.
Thirdly, the company said in a statement that “given the uncertainty on timing; to resolve the remaining legal and also, regulatory hurdles, PennEast believes it is not prudent to complete the acquisition of the rights of way in the pending actions in Pennsylvania; as it might not be necessary for some time.”
Moreover, this uncertainty that the company points out, caused the company’s partner, New Jersey Resources Corp, to announce a $72.7 million after-tax impairment charge related to its investment in the project.
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PennEast almost two years behind schedule
In fact, back in June, the U.S. Supreme Court overturned a Third Circuit decision that blocked PennEast from using federal eminent domain rules to seize New Jersey state-owned or controlled land, as we reported previously.
However, PennEast still needs permits from environmental Pennsylvania and New Jersey regulators and others before it can start construction; in addition to completing the rights of way.
On the other hand, the U.S. Federal Energy Regulatory Commission approved the project back in 2018; PennEast hoped to complete the project back in 2019.
Finally, the Pipeline is 120-miles long; it is designed to deliver 1,1 billion cubic feet per day of gas from the Marcellus shale to customers in Pennsylvania and New Jersey.
