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Ruling Gives Life to Under-the-Radar Pipe Project

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National Fuel Gas (NFG) recently received a favorable ruling for its Northern Access pipeline project that could open new takeaway from the Appalachian Basin.

The US Court of Appeals for the District of Columbia granted NFG an extension to complete the pipeline project by December 31, 2024.

Northern Access consists of ~100 miles of new pipeline from Sergeant Township, PA to the Porterville compressor station near Elma, NY. The project would provide 500 MMcf/d of transportation from the Marcellus producing area in McKean County, PA in northeastern Pennsylvania, including potential delivery of 350 MMcf/d into Empire Pipeline and 150 MMcf/d into Tennessee Gas Pipeline (TGP).

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NFG will also expand Empire Pipeline as part of the project, adding compression to increase capacity by ~350 MMcf/d for delivery into TC Energy’s (TRP) Canadian Mainline at the border crossing in Erie County, NY. Seneca Resources, NFG’s E&P subsidiary, has subscribed to all of the project’s capacity under a 2014 contract.

If completed, EDA expects Northern Access to add at least 350 MMcf/d of meaningful egress from the Appalachian Basin via Empire, allowing Pennsylvania production to grow to a higher ceiling. TGP is not expanding its own pipeline facilities, but the project will enable more Appalachian gas to compete with Canadian imports received on TGP at the Niagara border point.

While Mountain Valley Pipeline (MVP) has received the lion’s share of public attention, NFG’s project has faced similar delays obtaining federal permits, including the Section 401 water quality certification and a Section 404 permit from the US Army Corps of Engineers. MVP’s fate is more certain after an intervention by Congress, but Northern Access still has legal hurdles to pass to complete the project. We do not currently model completeion of Northern Access in our models.

In the latest Macro Supply and Demand Forecast, East Daley models a Y-o-Y decline of ~0.5 Bcf/d in Appalachian production in 2024, down from the recent supply peak at YE23 (see figure). Our outlook is shaped by the disincentive of low prices and producer shut-ins. For a more detailed regional view, EDA breaks down the outlook for production, demand and pipeline flows in the Northeast Supply and Demand Forecast. – Alex Gafford Tickers: NFG, TRP.


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