On December 2, 2014, FERC authorized Constitution Pipeline Company, LLC (“Constitution”) to construct and operate its proposed approximately 124-mile-long, 30-inch diameter interstate pipeline, and related facilities, extending from Susquehanna County, Pennsylvania, to a proposed interconnection with Iroquois Gas Transmission System, L.P. (“Iroquois”) in Schoharie County, New York (the “Constitution Pipeline”).  In the same order, FERC also authorized Iroquois to construct and operate compression facilities, and modify existing facilities, in the town of Wright, New York (the “Wright Interconnect Project”), and to lease the associated incremental capacity associated with the Wright Interconnect Project to Constitution.

As proposed by Constitution in June 2013, the Constitution Pipeline – whose members include Williams Partners Operating LLC, Cabot Pipeline Holdings LLC, Piedmont Constitution Pipeline Company, and Capitol Energy Ventures Corporation – will cost approximately $683 million and provide up to 650,000 dekatherms (Dth) per day of firm transportation service.  Once constructed, the Constitution Pipeline will help bring Marcellus Shale supplies in Northern Pennsylvania to natural-gas markets in New York and New England.  Constitution noted in its application that the design capacity of the Constitution Pipeline is already fully subscribed, with Cabot Oil & Gas Corporation for 500,000 Dth per day of firm transportation service and Southwestern Energy Services Company for 150,000 Dth per day of firm transportation.

Meanwhile, Iroquois noted in its own June 2013 application that the Wright Interconnect Project would help support delivery of the 650,000 Dth per day of capacity on the Constitution Pipeline into Iroquois’ existing mainline and the Tennessee Gas Pipeline Company, L.L.C. system.  According to Iroquois’ application, the estimated cost of the Wright Interconnect Project – which will be located on property already owned by Iroquois in Wright, New York – will be approximately $75 million.

In its order approving both projects, FERC concluded that the projects will provide benefits to the market that outweigh any adverse effects on other market participants and on landowners and surrounding communities.  Additionally, FERC stated that if the projects are “constructed and operated in accordance with applicable laws and regulations, the projects will result in some adverse environmental impacts, but that these impacts will be reduced to less-than-significant levels with the implementation of” certain mitigation measures.  Accordingly, FERC conditioned its authorizations on various environmental conditions Constitution and Iroquois must follow when they construct their respective projects.

A copy of the order is available here.



*Disclosure – Troutman Sanders LLP represented  Iroquois Gas Transmission System, L.P. in this FERC proceeding