Williams Discontinues New York Pipeline Project After Key Permit Denial

(Reuters) — Williams has put its controversial Northeast Supply Enhancement (NESE) natural gas pipeline on hold after New York environmental regulators denied another key water permit for the project on Friday. 

The Department of Environmental Conservation (DEC) said the construction of the project would not meet the state’s rigorous water quality standards. 

Williams has said the project, which includes an offshore pipe between New Jersey and Long Island, New York, will cost about $1 billion and could enter service in time for winter 2021 heating season.

Williams said in an email it was disappointed with the decision. 

“While we continue to believe in the fundamentals of this project, we will not refile in New Jersey or New York at this time,’’ said Laura Creekmur, spokesperson for Williams,

The company said in its statement that it would not refile the permit applications at this time. 

“The decision to pause this important infrastructure project is unfortunate for the region,” Williams said in the statement.

In mid-2019, regulators in New York and New Jersey denied Williams’ applications for the permits stating the project could adversely impact water quality in the New York Bay.

After New York regulators denied the water certification, the U.S. unit of UK-energy firm National Grid Plc, which agreed to buy gas from Williams’ pipe, imposed a moratorium in on signing new customers in May 2019. 

National Grid, which serves about 1.8 million customers in Brooklyn, Queens, Staten Island and Long Island, said it would not have enough gas to supply existing and new customers without the pipe. 

That prompted New York Governor Andrew Cuomo to threaten to revoke National Grid’s license to operate its gas utility.

Ultimately, National Grid in November agreed to end the moratorium and pay $36 million, most of which it will spend on conservation and clean energy projects.

National Grid also agreed to come up with plan, part of which was released last week, to meet long-term demand of its downstate gas customers. One of two proposals in that plan included construction of Williams’ NESE pipe by winter 2021-2022.

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