VALLEY FORGE, PA—UGI Energy Services has submitted a pre-filing request to the Federal Energy Regulatory Commission (“FERC”) to approve plans to construct an approximately 35-mile pipeline to bring additional interstate natural gas supplies, potentially including supplies produced in the Marcellus and Utica shale regions, to growing natural gas markets in central Pennsylvania.

The pipeline would begin in Lycoming County in north-central Pennsylvania and end at the proposed power plant near Shamokin Dam. The new pipeline is expected to benefit the region's economy and create jobs. UGIES says it expects to invest more than $150 million to build the pipeline.

“We are excited about this project that will continue to expand natural gas availability in the Pennsylvania region,” says John Walsh, president and CEO of UGI Corporation. “In addition to helping lower natural gas costs, we are proud that it is expected to create jobs and stimulate economic growth.”

There are a number of customary conditions that will need to be satisfied prior to commencement of the project, including FERC approval and execution of precedent agreements, the company says.

The Sunbury Pipeline is designed to provide up to 200,000 decatherms (Dth) per day of natural gas to the central Pennsylvania area. A therm is equivalent to 100,000 BTUs, so a decatherm is 1,000,000 BTUs.

UGIES is negotiating a precedent agreement for approximately 180,000 Dth/d of capacity with a foundation shipper, Hummel Station LLC, which is planning to construct a power plant at the existing site of the coal-fired Sunbury Generation LP facility near Shamokin Dam in Snyder County, PA. UGIES will hold an open season within the next month to solicit additional firm shippers for the project. 

UGIES will complete preliminary engineering studies in the coming months. A formal application before FERC is expected to be filed in mid-2015 and construction of the pipeline is expected to begin in 2016.