Dominion, Tennessee Gas Pipeline ink 10-year lease agreement to move Marcellus Shale

Source: Dominion

Dominion’s (NYSE: D) natural gas transmission and storage subsidiary, Dominion Transmission, has reached a 10-year lease agreement with Tennessee Gas Pipeline Company for firm capacity to move Marcellus shale natural gas supplies

The Ellisburg-to-Craigs project, with capacity of 150,000 dekatherms per day, will move natural gas from Tennessee's 300 Line pipeline system in northern Pennsylvania to its 200 Line pipeline system in upstate New York. 

In June 2010, Dominion Transmission reached a 15-year agreement to transport Marcellus Shale for CONSOL Energy.

"Dominion Transmission's hub-and-spoke network crisscrossing the Marcellus shale producing area provides many opportunities to help transport new natural gas supplies to market," said Thomas F. Farrell II, chairman, president and chief executive officer of Dominion. "This agreement with Tennessee for new capacity is an excellent example." 

Dominion plans to file for a FERC certificate in December. Once the project is approved, construction will commence in March 2012, with a planned in-service date of November 1, 2012. Construction plans include additional compression facilities and a new measurement and regulating station at the Craigs interconnect with Tennessee in New York. Dominion will also add regulating facilities on its system in northern Pennsylvania. 

Dominion Transmission provides gathering, processing, transportation and storage services in the Appalachian basin, including the heart of the Marcellus shale production area. 

Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of approximately 27,600 megawatts of generation, 12,000 miles of natural gas transmission, gathering and storage pipeline and 6,000 miles of electric transmission lines. Dominion operates the nation's largest natural gas storage system with 942 billion cubic feet of storage capacity and serves retail energy customers in 12 states.

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