PennEast says it will complete first phase of $1. 2 billion gas pipeline in 2022

Aug 12 - PennEast Pipeline said on Thursday it still expects to complete the first phase of its $1.2 billion natural gas pipeline in 2022 in Pennsylvania even though it put off acquiring rights of way for the project due to legal and regulatory hurdles.

PennEast, which seeks to complete the second phase of the pipeline's first half from Pennsylvania into New Jersey in 2023, is just one of several long-delayed projects faced opposition from Northeastern states as the region transitions from fossil fuels to cleaner forms of power, like wind and solar.

Given the uncertainty on timing to resolve the remaining legal and regulatory hurdles, PennEast believes it is not prudent to terminate the acquisition of the rights of way in the pending action in Pennsylvania as it might not be necessary for some time, PennEast said in a statement.

That uncertainty caused New Jersey Resources Corp colleague PennEast to announce a $72.7 million impairment charge after tax related to its investment in the project last week.

In June, the U.S. Supreme Court overturned a Third Circuit decision that blocked PennEast from using New Jersey state-owned eminent domain rules to seize federal lands.

The victory cleared one hurdle, but more remain remain. In addition to the right of way, PennEast still needs permits from Pennsylvania and New Jersey regulatory agencies and others before it can start construction.

The U.S. Federal Energy Regulatory Commission approved PennEast's request to build the pipeline in January 2018. The company hoped to completed the project in 2019.

The 120-mile pipe is designed to deliver 1.1 billion cubic feet of gas per day from Marcellus shale to customers in New Jersey and Pennsylvania.

PennEast partners include units of NJR, South Jersey Industries Inc., UGI Corp., Southern Co., Enbridge Inc. and NTS Inc.