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Home News Regions Central Virginia Dominion announces joint venture with other companies to build $5 billion natural gas pipeline

Dominion announces joint venture with other companies to build $5 billion natural gas pipeline

Published September 2, 2014 by Paula C. Squires

Four major U.S. energy companies — Dominion, Duke Energy, Piedmont Natural Gas and AGL Resources — announced Tuesday the formation of a joint venture to build and own a $4.5 billion to $5 billion, 550-mile natural gas pipeline. It would run from Harrison County, W. Va., southeast through Virginia with an extension to Chesapeake in Virginia and then south through central North Carolina to Robeson County.

Details about the pipeline came from a joint press release and a news conference at the state capitol, with Democratic  Gov. Terry McAuliffe touting the project’s economic benefits.

The partnership, called Atlantic Coast Pipeline LLC, will own the pipeline initially proposed by Dominion as the Southeast Reliability Project. It is designed in part to meet needs identified in requests for proposals last April by Duke Energy and Piedmont, and in June by Virginia Power Services Energy.

The pipeline would provide a new route for direct access to the burgeoning production in the Marcellus and Utica shale basins of West Virginia, Pennsylvania and Ohio. It also would deliver natural gas supplies to growing markets for additional customers in Virginia and North Carolina.

The chief executives of the four sponsoring companies — Thomas F. Farrell II of Richmond-based Dominion, Lynn J. Good of Duke Energy in Charlotte, Thomas E. Skains of Piedmont Natural Gas and John W. Somerhalder II of AGL Resources in Atlanta  — issued a joint statement calling the pipeline “ a transformational project for our region. It will create thousands of construction jobs during development and significant new revenue for state and local governments throughout North Carolina, Virginia and West Virginia.”

During Tuesday’s press conference, the governor’s office released the results of a study by Richmond-based Chmura Economics and Analytics. It said the pipeline’s construction would:

·       Produce about $1.4 billion in economic activity in the commonwealth.

·       Support more than 8,800 new Virginia jobs, including nearly 5,000 directly supported by spending on construction activities.

·       Generate more than $14.6 million in additional tax revenues, including individual income and corporate tax revenues.

·       Generate a total of $37.8 million per year in ongoing economic activity, once the pipeline is complete, supporting a total of 188 jobs annually and producing more than $233,000 in additional state tax revenue.

“This project is a game changer for Virginia’s economy, and the benefits will be both immediate and long-lasting,” said Gov. McAuliffe. “In addition to the thousands of jobs and billions in economic activity that the construction of this project will create, the Atlantic Coast pipeline will lower energy costs for Virginia residents and businesses and help reduce carbon emissions in our state and region.”


Dominion would build and operate the pipeline on behalf of the venture, and it would hold the majority ownership interest at 45 percent. The other ownership stakes are: Duke Energy, 40 percent; Piedmont, 10 percent; and AGL Resources, 5 percent.

Subsidiaries and affiliates of all four joint venture partners plan to be customers of the pipeline under 20-year contracts, pending regulatory approvals. If approved, construction of the pipeline could begin as early as mid 2016, with service beginning in late 2018. It would have an initial daily capacity of 1.5 billion cubic feet of natural gas. The main pipeline would have a 42-inch diameter in West Virginia and Virginia, reducing to 36 inches in diameter in North Carolina.

Dominion has begun surveying to determine the best route and has met with strong resistance in Nelson County. Thirty-five miles of the pipeline would run through rural Nelson, affecting about 225 parcels. A recent public meeting on the pipeline drew a standing-room only crowd, and several groups already have formed to fight the project. Some Nelson residents and businesses have posted “no pipeline” signs along Virginia Route 151, a scenic byway known for its wineries and breweries.

Dominion said it plans to make a prefiling request with the Federal Energy Regulatory Commission (FERC) this fall on behalf of Atlantic Coast Pipeline. It expects to file its FERC application in the summer 2015. If it receives the FERC Certificate of Public Convenience and Necessity in summer 2016, construction could begin shortly thereafter.

The extensive FERC review process solicits input from numerous local, state and federal entities, and private citizens. It examines cumulative impacts on public safety, air quality, water resources, geology, soils, wildlife and vegetation, threatened and endangered species and cultural and historic resources.

Virginia has limited access to supplies from Marcellus and Utica shale. According to Dominion, the project would provide the increased infrastructure to support growing demand for natural gas-fired generation and would add supply diversity for reliability and price stability.

 

Glen Besa, Virginia Director of the Sierra Club, expressed disappointment with McAuliffe’s endorsement of the project. “It is most disheartening that the very first major energy announcement coming from the McAuliffe administration is in support of Dominion's natural gas pipeline to facilitate expanded fracking,” Besa said in a statement.

“There are far more opportunities to create jobs and address climate change in Virginia through investments in energy efficiency, solar power and offshore wind. For example, this week is the one-year anniversary of Dominion winning the right to develop offshore wind off the Virginia Coast.  We really need Gov. McAuliffe to push Dominion to move forward on offshore wind.”

 

 

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