UGI Energy Services launches open season for $1bn natural gas pipeline

UGI Energy Services and Capitol Energy Ventures Corporation have launched an open season seeking non-binding contracts from shippers to carry natural gas volumes on the proposed $1bn Commonwealth Pipeline in the US.

The pipeline will transport 800,000 dekatherms of natural gas per day to city gates and interstate pipeline systems, at points between the southern terminus of Inergy’s MARC I line and the Dominion Cove Point LNG, LP, pipeline in Charles County, Maryland.

The proposed project is targeting shippers seeking additional supply flexibility, liquid points for trading locally-produced Marcellus and Utica shale gas, direct access to premium markets in the north-east and mid-atlantic region, the ability to capture pricing differentials between the various interconnected market pipelines, and firm access to long-lived dry gas reserves.

Commonwealth will provide shippers with additional opportunities to buy and sell supplies, and to transport natural gas to where it is needed and valued most.

The pipeline will be primarily used for delivering natural gas produced in Pennsylvania’s Marcellus and Utica Shale plays and neighboring states to natural gas markets in central and eastern Pennsylvania, accessing the markets in Baltimore and Washington D.C.

The 30-inch pipeline will connect local markets to Marcellus and reduce transportation costs for customers who procure natural gas from the Gulf coast.

The pipeline is also expected to link with a number of interstate pipelines along its route, allowing greater supply diversity to the mid-atlantic region and exploring the natural gas produced from the Marcellus.

Construction could begin in 2014 and the pipeline is scheduled to go into service in 2015.

The open season will close on 8 June 2012.