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Pipeline companies halt project

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Kentucky Press News Service

 The proposed Bluegrass Pipeline, which would have crossed a dozen Kentucky counties over a 180-mile route – including LaRue County – appears to be dead.

Williams Co. and Boardwalk Pipeline Partners, the two energy companies behind the controversial project, announced Monday that they could not put together a large enough customer base for natural gas liquids to make the project viable.

NGLs are used in plastics and commercial fuel – and are generally classed as hazardous materials.

In a statement posted on the Bluegrass Pipeline website by company representatives Bill Lawson and Michael McMahon, the two said:

“Recently, we reached a point in the development of the project where we needed to make some important decisions about timing and additional investment. While data shows there will soon be a need for a large-scale solution like Bluegrass Pipeline to meet market needs, potential customers to-date have so far chosen to focus on local solutions. As a result, we continue to pursue support for the project, but we are exercising capital discipline and not investing additional capital at this time. In short, Bluegrass Pipeline appears to be a project that’s ahead of its time.”

Their website statement continued:

“The need to move NGLs from the liquids-rich natural gas production in the Utica and Marcellus shale plays to markets is very real and an important component of enabling the manufacturing renaissance in America. Because large-scale infrastructure projects like Bluegrass Pipeline take years to develop, we began the project early in order to have a timely solution for producers and their production.

Projects of this size are not new for us. We have been building and operating pipelines in America for more than a century. During that time, we’ve developed strong relationships with hundreds of communities and tens of thousands of landowners across dozens of states. We will continue to have discussions with potential customers to determine their needs, the needs of the market and our project.”

The project had awarded a number of community grants in various communities. To this, the company website said:

“Our current cycle deadline for applications is April 30. Grants will be awarded by June 15. The fourth project development grant cycle is still planned but it is unclear when the application cycle will begin.”

And some landowners had sold rights of way to the pipeline project. On that subject, the pipeline website said:

“In most cases, we made agreements with landowners called options – Bluegrass Pipeline has the option to purchase and ultimately build the pipeline using the landowner’s granted easement within three years of the agreement. Landowners with whom we have agreements in place received an upfront, nonrefundable payment upon signing the agreement. If we exercise our easement option to build the pipeline before the option expires (typically within the three-year timeframe), we will pay them the remainder of the amount in the agreement.

“If we do not exercise the easement option within the three-year timeframe, the option will expire and the landowner will not receive the remaining payment. The land rights revert back to the current landowner.”

A spokesman for the company said about two-thirds of the easements needed in Kentucky had been secured. The company planned to construct new lines and reconstruct others to reach from Pennsylvania to the Gulf Coast.

The proposed pipeline received substantial opposition in several communities along the proposed route.

Franklin Circuit Judge Phillip J. Shepherd ruled last month that the project cannot use eminent domain to secure easements if landowners won’t sell.

Editor Linda Ireland contributed to this story.