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Wednesday, April 30, 2014

Pipeline plan suspended; developers site lack of customers, but they face several other problems

A controversial pipeline project may never be built. The $1.5 billion Bluegrass Pipeline, designed to carry up to 400,000 barrels of natural gas liquids per day from Pennsylvania and West Virginia's shale-gas fields to the Gulf Coast, has been put on indefinite hold, with developers saying "it has not received the necessary customer commitments."

Williams Companies map
While the hold is indefinite, there is something of a deadline: "If Bluegrass Pipeline does not exercise its options for easements within the three-year term of the option, the easement will expire," Kayla Pickrell writes for the Midway Messenger in Kentucky, where there was concern about the pipeline's safety, especially in karst topography, and possible use of eminent domain to get right of way from unwilling landowners.

Williams Companies, one of two partners in the project, said its decision "was not based on opposition, which played out at public meetings, in the courts, the legislature, news outlets and social media," James Bruggers reports for The Courier-Journal of Louisville.

Marcellus Drilling News says future prospects for the pipeline are cloudy because of the Kentucky opposition, an adverse state court ruling (upheld on appeal) against eminent domain, questions about Williams' partner and competition from a more-or-less parallel pipeline that doesn't have to deal with landowners because it was built for Gulf gas fields decades ago and will now reverse its flow (as would most of the Bluegrass Pipeline, from Hardinsburg, Ky., south).

"Williams says the project was ahead of its time. We say that's bunk," MDN declares. "By the time this project would have gone online, in 2015, there will be dramatically more NGLs being produced . . . Second, and perhaps just as important as the Kentucky problem, is the financial stability of joint venture partner Boardwalk Pipeline Partners." (Read more; subscription required for full access)

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