UGI Inergy to jointly develop Marcellus shale gas line

Inergy Midstream LP, UGI Energy Services Inc., and Capitol Energy Ventures Corp., a subsidiary of WGL Holdings Inc., plan to jointly market and develop a new interstate natural gas pipeline known as the Commonwealth Pipeline. The proposed 200-mile, 30-in. OD pipeline will transport at least 800 MMcfd of Marcellus shale gas production and is expected to be in service during 2015.

Commonwealth Pipeline will extend from the southern terminus of Inergy Midstream’s Marc I pipeline in Lycoming County, Pa., due south through central and eastern Pennsylvania to markets across southeastern Pennsylvania, including Philadelphia, and the Baltimore and Washington, DC, metropolitan areas. The companies expect the pipeline to interconnect with a number of interstate pipelines along its route.

Inergy expects UGI and Capitol to execute precedent agreements to become anchor shippers on the line, with the companies owning equal equity interests in the company formed to own the pipeline. Inergy Midstream will construct and operate the pipeline, expected to cost roughly $1 billion split equally between the three companies.

UGI last year announced plans to extend its Auburn Gathering System 30 miles from its terminus in Wyoming County, Pa., to Luzerne County, Pa., including a connection to Transcontinental Gas Pipeline. UGI expects the extension to enter service third-quarter 2013 (OGJ Online, Oct. 21, 2011).

Contact Christopher E. Smith at chriss@ogjonline.com.

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