Dominion Says Permit Delays to Blame for Canceled Gas Project

(Bloomberg) -- While the top U.S. energy regulator moves swiftly on LNG export terminals -- a priority of the Trump administration -- domestic natural gas projects may be falling through the cracks.

On Friday, Dominion Energy Inc. pulled its application to expand a small natural gas project which it said had been “adversely impacted’’ by delays at the Federal Energy Regulatory Commission.

The agency has been split 2-2 between Republicans and Democrats since the death of former Chairman Kevin McIntyre at the start of the year, and Democrats have been pressing for climate change to play a bigger role in how the agency approves LNG and gas pipeline approvals. A breakthrough on LNG permitting in February has paved the way for four projects to be cleared since then.

In the meantime, Dominion’s Sweden Valley pipeline expansion has seen little progress after receiving a positive environmental assessment in August. The company had planned for the line to go into service by November, according to a letter to FERC. But the commission’s inaction prompted a key customer to opt for terminating the project, Dominion said.

Market Factors

“I am deeply disappointed that the unique circumstances of this case prevented the Commission from approving the project as quickly as the applicant had hoped, and that as a result they are withdrawing the application,” FERC Chairman Neil Chatterjee said in a statement.

The Sweden Valley project had an estimated cost of $48 million and would have transported gas from northern Pennsylvania for delivery in Ohio. A call to Dominion wasn’t immediately returned.

Dominion’s decision may have also been motivated by market factors, said Katie Bays, an energy analyst and co-founder of Washington-based Sandhill Strategy. “This is an opportunity for a developer to kind of call attention to some practices at FERC that they don’t find very helpful.”

To contact the reporter on this story: Stephen Cunningham in Washington at scunningha10@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Catherine Traywick, Jessica Summers

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