Vermont Gas scraps plans for phase 2 of pipeline expansion project in US

Vermont Gas Systems said it will not go ahead with its proposal to construct phase 2 of its planned pipeline expansion project in the US.

The second phase was planned from Middlebury to the International Paper’s facility in Ticonderoga, New York.

International Paper had agreed to pay the entire cost of the second phase and part of the cost of phase 1. However, when the price for phase 2 went from $99m to $135m, International Paper elected to withdraw from the deal.

Vermont Gas president and CEO Don Rendall said: "As the company committed to the Vermont Public Service Board last year,Vermont Gas recently completed a thorough review of the schedule, costs and challenges to complete Phase 2 under current business conditions.

"IP and Vermont Gas extensively discussed the issues raised by this reassessment of the project, and we were unable to find a mutually acceptable path forward."

The move will not affect phase 1’s certificate of public good or cost estimate.

The Vermont Public Service Board evaluated the first phase as a stand-alone project, without phase 2.

Vermont Gas updated cost estimate for phase 1, which was released in December 2014.

Vermont Gas vice president for system expansion Jim Sinclair said: "We will now focus our efforts on completing Phase 1 of our expansion plan to serve Addison County as far south as Middlebury and explore creative options for extending service to more Vermont communities, including Rutland."