Energy

PennEast aims to complete first phase of natgas pipe in 2022, despite right-of-way delay

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Construction work continues on Sunoco's Mariner East II natural gas pipeline near Morgantown in Chester County, Pennsylvania, August 1, 2017. REUTERS/Charles Mostoller

Aug 12 (Reuters) - PennEast Pipeline said on Thursday it still expects to complete the first phase of its $1.2 billion natural gas pipe in Pennsylvania in 2022 even though it put off acquiring rights of way for the project due to legal and regulatory hurdles.

PennEast, which seeks to complete the pipeline's second phase from Pennsylvania into New Jersey in 2023, is just one of several long-delayed projects facing opposition from Northeastern states as the region transitions from fossil fuels to cleaner forms of power, like wind and solar. read more

"Given the uncertainty on timing to resolve the remaining legal and regulatory hurdles, PennEast believes it is not prudent to complete the acquisition of the rights of way in the pending actions in Pennsylvania, as it might not be necessary for some time," PennEast said in a statement.

That "uncertainty" caused PennEast partner New Jersey Resources Corp (NJR.N) last week to announce a $72.7 million after-tax impairment charge related to its investment in the project.

In June, the U.S. Supreme Court overturned a Third Circuit decision that blocked PennEast from using federal eminent domain rules to seize New Jersey state-owned or controlled land. read more

That victory cleared one hurdle, but more remain. In addition to completing the rights of way, PennEast still needs permits from environmental Pennsylvania and New Jersey regulators and others before it can start construction.

The U.S. Federal Energy Regulatory Commission (FERC) approved PennEast's request to build the pipeline in January 2018. The company had hoped to complete the project in 2019.

The 120-mile (193 kilometer) pipe is designed to deliver 1.1 billion cubic feet per day of gas from the Marcellus shale to customers in Pennsylvania and New Jersey.

PennEast partners include units of NJR, South Jersey Industries Inc (SJI.N), Southern Co (SO.N), Enbridge Inc (ENB.TO) and UGI Corp (UGI.N).

Reporting by Scott DiSavino; Editing by Dan Grebler

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