Inergy Midstream, UGI Energy Services, a subsidiary of UGI Corporation, and Capitol Energy Ventures Corporation, a subsidiary of WGL Holdings, have launched an open season seeking non-binding contracts from shippers to carry natural gas volumes on the proposed $1bn Commonwealth Pipeline.
The joint venture, formed by the three companies in March, revealed the pipeline will transport 800,000 dekatherms of natural gas per day to city gates and interstate pipeline systems at points between the southern terminus of Inergy’s MARC I line and the Dominion Cove Point LNG, LP pipeline in Charles County, Maryland.
Inergy Midstream said Commonwealth pipeline project will provide shippers with a short-haul transportation option for direct access to Marcellus and Utica Shale gas supplies, eliminating the system-wide fuel and maintenance costs associated with long-haul pipelines.
WGL Holdings chairman and CEO Terry McCallister earlier said, "the expansion and reinforcement of our regional natural gas delivery system will benefit all those residential and commercial customers who rely on natural gas."
The pipeline will be primarily used for delivering natural gas produced in Pennsylvania’s Marcellus and Utica Shale plays and neighboring states to natural gas markets in central and eastern Pennsylvania; accessing the markets in Baltimore and Washington D.C and the Delmarva Peninsula.
The 30-inch pipeline will connect local markets to Marcellus and reduce transportation costs for customers who majorly procure natural gas from the Gulf coast.
The pipeline is also expected to link with a number of interstate pipelines along its route, allowing greater supply diversity to the mid-Atlantic region and exploring the natural gas produced from the Marcellus.
Construction could begin in 2014 and the pipeline is scheduled to go into service in 2015.
Inergy Midstream will construct and operate the pipeline while Vega Energy Partners will assist in marketing transportation capacity for the pipeline.
All the three sponsors will hold equal equity interests in the project company, formed to own the pipeline and equally fund the project.
The open season will close on 8 June 2012.