The US Federal Energy Regulatory Commission (FERC) has approved construction of the 193km long PennEast interstate natural gas pipeline project to be built with an investment of about $1bn.
Approval for the 36inch pipeline, which will transport natural gas from the Marcellus Shale region in Pennsylvania to New Jersey, comes after a wait of three years. During this period, the FERC had gathered feedback from landowners, public officials, regulators and other stakeholders.
The pipeline project is owned by a consortium that includes NJR Pipeline, SJI Midstream, Southern Company Gas, Spectra Energy Partners and UGI Energy Services.
It will originate from the Marcellus Shale production area near Dallas in Pennsylvania, and will link to the existing underground Transcontinental pipeline near Pennington in New Jersey. The PennEast pipeline route covers 24 municipalities in Pennsylvania and six in New Jersey.
Expected to become operational in 2019, the PennEast pipeline has been designed to transport about a billion cubic feet of natural gas per day. Construction work is set to begin this year following the FERC approval.
PennEast Pipeline said that the access to additional supplies of natural gas through its pipeline will bring down the cost of gas in eastern Pennsylvania and New Jersey, even during non-peak periods.
PennEast Pipeline board of managers chair Anthony Cox said: “Approval of the PennEast Pipeline is a major victory for New Jersey and Pennsylvania families and businesses.
“They will reap the benefits of accessing one of the most affordable and abundant supplies of natural gas in all of North America. PennEast will lower gas and electricity costs, increase reliability, improve air quality, and make the region more competitive for jobs in the coming decades.”
PennEast Pipeline said that about 90% of the natural gas to be transported through the pipeline is supported by contracts with regional gas utilities and power generation firms serving local customers. These include contracts with New Jersey Natural Gas, South Jersey Gas, PSEG Power, ConEd and Elizabethtown Gas.