New England could get $3B natural gas pipeline expansion

Proposed expansion to be in service by late 2018.

Spectra Energy Corp. (SE) and Northeast Utilities proposed a $3 billion pipeline expansion in New England, the latest attempt to fix a natural-gas bottleneck that sent energy prices soaring during a frigid winter.

The Access Northeast project will boost capacity on Spectra’s Algonquin and Maritimes pipelines by as much as 1 billion cubic feet a day, the companies said in a statement today. The project, half owned by each company, will supply fuel for power plants and home heating and is expected to be in service in November 2018.

Wholesale power prices for the spring reached a six-year high in New England as a deep freeze known as the polar vortex gripped the eastern U.S., driving demand for gas. A shortfall in pipeline capacity has restricted supplies in New England, even as output from Pennsylvania’s booming Marcellus Shale gas formation nearby reached a record high this year.

“New England wholesale electricity costs were nearly double compared to the previous year, largely due to pipeline constraints,” Tom May, chief executive officer of Boston and Hartford, Connecticut-based Northeast Utilities (NU), said in today’s statement. “These challenges will remain the same for the next several years, and our customers will feel the effects, if we do not act.”

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Source: Bloomberg News