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Wed., 9:10am: Bluegrass pipeline halted in Utica region

April 30, 2014
Tribune Chronicle

SALEM - On Monday, joint-venture pipeline partners in the Bluegrass Pipeline said they are stopping investment in the 1,100-mile line from Pennsylvania to the Gulf of Mexico.

The Williams company of Tulsa and Boardwalk Pipeline Partners of Houston formed the Bluegrass Pipeline LLC which planned to connect natural gas liquids produced in the Marcellus-Utica areas with markets supplied from the U.S. Gulf Coast.

The pipeline was proposed as a strong long-term solution in the marketplace.

In a statement on Monday, Williams said they suspended capital investments in the pipeline primarily in response to an insufficient level of firm customer commitments.

Two spokesmen, Bill Lawson and Michael McMahon, said in a joint statement that the Bluegrass Pipeline appears to be a project ahead of its time.

During an earnings call on Monday transcribed on the Seeking Alpha website, Boardwalk Pipeline CEO, President and Director Stanley Horton said, "On our Bluegrass pipeline project, to date we've been unable to obtain sufficient firm customer commitments and are no longer making capital investments in the Bluegrass pipeline.

"We will continue to consider all of our options."

Horton said, "The Bluegrass and Moss Lake projects are not dead. We are no longer funding any capital for those projects, but the joint venture between us and Williams is still in place and we continue to have discussions with customers.

In an October 2013 release, Boardwalk Pipeline Partners said a liquefied petroleum gas (LPG) export facility in the Lake Charles, La., area, the proposed Moss Lake LPG Terminal, would be located on the Calcasieu River and serve tanker ships transporting LPG to Asian, Latin American and European markets.

Horton said, "But again over the past 12 months we have had these discussions with customers and I've not been able to get commitments, that's why we decided that we were no longer going to fund the capital.

"But again the project is not dead, discussions with customers continue. We have the full optionality to look at all uses for that pipeline that would be abandoned.

Last August, during a presentation in Columbiana, Williams and Boardwalk said they expected to lay pipe, once final OKs for the 1,100 mile gas transmission line were obtained, beginning this year.

Maps showed the 20-inch pipeline cutting diagonally across Columbiana County entering in Unity Township and moving southwest diagonally toward Hanover and Franklin townships and into Carroll County.

Williams and Boardwalk are not affiliated with the $300 million Hickory Bend that is currently moving through Mahoning County and three townships in Columbiana County including Unity, Fairfield and Salem.

During the Columbiana presentation, Bluegrass Pipeline Senior Project Engineer Lee P. Andrews said the company was in the preliminary stages of obtaining survey permissions from landowners and had yet to secure right-of-ways.

He said it was early and they needed landowner permission since there is no eminent domain. Andrews said the project began in 2013 when it became clear the Marcellus and Utica shale region was attractive to the oil and gas market and Williams and Boardwalk Pipeline LLC agreed to develop the pipeline from the shale plays in Ohio, Pennsylvania and West Virginia to Texas.

Estimating there were "likely over 3,000 tracts" of land along the entire route requiring negotiations, he said more than half of the route consisted of existing lines to be converted to the Bluegrass system.

 
 
 

 

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