Dallas, Texas 07/17/2015 (Financialstrend) – New England’s natural gas supply should receive a major boost in the coming months after Kinder Morgan Inc (NYSE:KMI) approved a $3.3 billion investment for its Northeast Energy Direct project. The investment is to be used to build a 30-inch pipeline able to carry up to 1.3 billion cubic feet of gas daily. However, earlier regulatory filings had suggested that the pipeline would have a capacity of between 1.3 and 2.2 billion cubic feet per day on a combination of 30 to 36-inch pipelines.
Calls for Lower Energy Costs
New Englanders reportedly paid more than $7 billion for electricity during the winter season of the last two years attributed to a small pipeline capacity. The expansion of the pipeline is expected to result in a reduction in energy costs going forward as Kinder Morgan Inc (NYSE:KMI) moves to service natural gas utilities as well as electricity generation customers.
Kinder Morgan Inc (NYSE:KMI) in a statement reiterated that the 1.3 billion cubic foot pipeline capacity should meet all the commitments already received from New England local gas distribution companies. Should circumstance arise calling for a 36 pipeline inch pipeline, the company remains more than ready to table an amended application with the Federal Energy Regulatory Commission.
Tennessee Gas Pipeline has already announced a number of adjustments to Northeast Energy Direct Proposed scope that involves reducing horsepower requirements at new compressor station locations. A review of routing alternatives will also be carried out as the filling process progresses. Kinder Morgan Inc (NYSE:KMI) plans to scale compression stations along the route as it moves to match firm subscription levels.
Opposition to the expansion of the project has been strong. However, Kinder Morgan Inc (NYSE:KMI) will take confidence on the projects long term prospect having already received commitments from Berkshire Gas and Columbia among other local distribution companies.