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Kinder Morgan shrinks proposed pipeline size

New Hampshire Union Leader

July 16. 2015 10:10PM

Kinder Morgan has decided to shrink the size of its proposed natural gas pipeline through Southern New Hampshire from 36 inches in diameter to 30 inches, which also reduces the size of a proposed compressor station in New Ipswich.

Neither change is likely to mollify opponents in the communities along the route.

“This would cause the same amount of environmental upheaval and disruption to landowners during construction as a larger pipeline would,” said Kathryn Eiseman, president of the Pipe Line Awareness Network for the Northeast.

The company has said all along that the pipeline could be 30 or 36 inches, based on demand, but had pre-filed with the Federal Energy Regulatory Commission for the larger diameter.

“The company will now file an amended resource report with FERC that will indicate the 30-inch configuration,” said Allen Fore, Kinder Morgan vice president for public affairs. “We have always said we won’t overbuild. We want to build to serve the natural gas needs of the region. At this point we are comfortable with a 30-inch pipeline as satisfying the customers we have secured and the customers we are looking to secure.”

The company announced on Thursday that its board of directors had approved a $3.3 billion investment based on the smaller diameter.

The 30-inch proposal means a compressor station planned for New Ipswich will be cut nearly in half, from 80,000 horsepower to 41,000, according to Fore, although the same amount of land will be required for the compressor and the pipeline itself.

“The needed work space may reduce a bit, but we’ll probably still be seeking a 50-foot permanent easement along the route, with an additional 50 to 75 feet for temporary workspace,” he said. “With a smaller project, we’ll have a smaller ditch and need less storage space for the pipe, which may reduce the temporary workspace.”

Contracts secured

The project is designed to transport low-cost natural gas from the Marcellus shale formation in Pennsylvania, along a route that starts in upstate New York, goes through northern Massachusetts, and enters the Granite State in Winchester. It then stretches across the southern tier of the state through 17 communities, including Milford, Merrimack, Londonderry, Litchfield and Pelham, before re-entering Massachusetts and terminating at Dracut.

Supporters of the pipeline say it is desperately needed to increase the flow of natural gas into the region, particularly during the winter months, to reduce home-heating and electricity costs. Opponents say the project is much larger than what is needed, and solutions on a smaller scale are already in the works.

Kinder Morgan announced in March that it had secured contracts from seven of the largest natural gas utilities in New England, including Liberty Utilities in New Hampshire, to ship 500,000 dekatherms per day, short of the 800,000 needed to justify a 36-inch pipeline. A dekatherm is a measurement of the fuel’s heat equivalent.

“Kinder Morgan still has the same amount of capacity subscribed for this pipeline as it did a full two years ago — about 500,000 dekatherms per day,” said Eiseman. “More than a quarter of this amount is just replacing capacity contracts on existing pipelines.”

Pipe Line Awareness Network for the Northeast is challenging the shipping agreement signed by Liberty Utilities before the N.H. Public Utilities Commission, with a hearing scheduled on July 21.

Expansion still possible

In a Wednesday conference call with investment analysts on the company’s second-quarter earnings, Kinder Morgan executive Jesse Arenivas said the 30-inch pipeline could accommodate up to 1.3 million dekatherms per day, through additional compression, if more customers come on board. “We’re really kicking off the project for 600,000 a day,” he said, “but certainly with the compression expansions we can scale it up as we get additional firm commitments.”

Eiseman said that could mean new compressor stations along the pipeline route, if approved.

“They are indicating that further disruption should be expected in coming years, with compression expansions either in the towns currently targeted for compressor stations, or new ones to be determined,” she said. “We’ve said all along that if they get their foot in the door, this new pipeline corridor would become the go-to location for additional compressor stations, as well as gas-fired power plants and other infrastructure.”

Kinder Morgan subsidiary Tennessee Gas Pipeline Co. is expected to file its formal application with FERC in October, with a final decision expected a year later.

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