2017 System Expansion Project

open season

Project Overview:
Eastern Shore Natural Gas Company (“Eastern Shore”) is pleased to announce the non-binding Open Season for its 2017 System Expansion Project (“2017 Expansion Project”).  Eastern Shore is proposing the 2017 Expansion Project as a general expansion of its pipeline system, which will allow customers the opportunity to obtain new transportation services from Eastern Shore’s two Receipt Zones for delivery to any of Eastern Shore’s three Delivery Zones.

Eastern Shore has previously held two non-binding Open Seasons seeking new capacity requests in the three delivery point areas of its pipeline system with anticipated in-service targets of November 2015, March 2016, and November 2016[1]. Eastern Shore has determined that combining the two previously announced projects into one project is the best path forward in light of Eastern Shore’s recent experience with increases in the time required to obtain approvals and permits required to construct and operate other expansion projects.  Eastern Shore anticipates that the 2017 Expansion Project will be in service between summer and fall of 2017.

Eastern Shore is issuing this Open Season to allow the market a final opportunity to submit nominations for new natural gas transportation service.  

Eastern Shore has received indications of interest in new firm transportation services, totaling 49,500 dts/day, from several customers through the prior two Open Season processes. Eastern Shore has agreed to treat these pre-existing expressions of interest as Anchor Shipper commitments, not subject to any pro rata allocation in this Open Season.

Based on the nominations received through the two previous Open Seasons and shipper inquiries for new transportation services, to commence in 2017, Eastern Shore has developed a preliminary design for the 2017 Expansion Project.  Following this Open Season, Eastern Shore will reevaluate the preliminary design.  Eastern Shore will develop a final design for the 2017 Expansion Project that is capable of accommodating the level of customer commitments received in a manner that will allow Eastern Shore to achieve the most economical cost while complying with safety, operational, and environmental standards.  Shippers that submit Shipper Nomination Forms through this Open Season are expected to execute binding Precedent Agreements following the finalization of the 2017 Expansion Project’s design, which is currently expected to occur on or before February 26, 2016.  The Precedent Agreements will include a Credit Addendum that specifies creditworthiness and credit support terms, which supplement the terms of Eastern Shore’s Federal Energy Regulatory Commission (“FERC”) Gas Tariff, as contemplated by FERC’s Creditworthiness Policy Statement.

Eastern Shore’s preliminary 2017 Expansion Project design includes a significant increase in receipt capacity from Texas Eastern Transmission, LP (“TETCo”) in Eastern Shore’s Receipt Zone 1.  Eastern Shore has determined that it can expand TETCo receipt capacity under its FERC blanket construction certificate.  Eastern Shore anticipates the increased TETCo receipt capacity to be available in advance of the 2017 Expansion Project’s in-service date.  Eastern Shore intends to make a tariff filing with the FERC that would allow it to reserve TETCo receipt capacity for the 2017 Expansion Project and to use the additional TETCo expansion receipt capacity on an interim basis until the 2017 Expansion Project’s in-service date.

    Background Information:    

Eastern Shore is an interstate natural gas pipeline company that has been serving the Delmarva Peninsula since 1959.  Eastern Shore operates under the jurisdiction of the FERC.

Eastern Shore receives natural gas at four upstream interstate pipeline interconnections for transportation to local distribution companies, industrial customers and electric power generation customers located in Delaware, Maryland and Pennsylvania. Eastern Shore’s pipeline system interconnects with Columbia Gas Transmission, LLC, in Daleville, Pennsylvania; with Transcontinental Gas Pipe Line Company, LLC, in Parkesburg, Pennsylvania and Hockessin, Delaware; and with Texas Eastern Transmission, LP, near Honey Brook, Pennsylvania. 


    Project Information At-a-Glance:   

Targeted in-service date: Summer 2017 – Fall 2017.  The actual in-service date is, however, subject to the timely issuance of all necessary regulatory authorizations, approvals and permits and the acceptance of them by Eastern Shore.  Construction delays beyond Eastern Shore’s control may also affect the actual in-service date.  Eastern Shore anticipates that it will initiate a pre-filing process at FERC during the second quarter of 2016, with a certificate application to follow later in 2016.  Depending on the final 2017 Expansion Project design and construction schedule, Eastern Shore anticipates that it may be able to commence service to some 2017 Expansion Project shippers earlier than others during the latter half of 2017.

Subscription Period:   Monday, January 25, 2016 through Monday, February 8, 2016.

Service:  Firm transportation service from existing Receipt Point(s) to Shippers’ requested Delivery Point(s).

Term:  The requested contract term for firm transportation service to be provided by the 2017 Expansion Project shall be a minimum of fifteen (15) years.  If a different term is desired, such term should be indicated on the Shipper Nomination Form.  Eastern Shore will evaluate alternative terms on a case-by-case basis. 

Rate:  Eastern Shore has developed a preliminary design for the 2017 Expansion Project based on the nominations received through the previous Open Seasons and shipper inquiries for new capacity to commence in 2017. After this Open Season closes, Eastern Shore will determine the facilities required to serve the aggregate firm transportation service requests received from the Anchor Shippers and the submitted Shipper Nomination Forms.  The cost of those facilities will be estimated, and preliminary rates will be developed.  Shippers must execute Precedent Agreements by February 26, 2016.  Initial Rates will then be calculated based on the level of binding customer commitments received (as evidenced by executed Precedent Agreements) and the cost of the facilities required to serve the aggregate firm transportation service requests of all Shippers executing Precedent Agreements.  

    Nomination Process:   

The subscription period for this Open Season will commence on Monday, January 25, 2016 and close at 5:00 p.m. EST on Monday, February 8, 2016.  Eastern Shore may, in its sole discretion, reject requests that would adversely affect the filing process and/or anticipated in-service dates or negatively impact the economics of the 2017 Expansion Project.  Eastern Shore may also, in its sole discretion, consider requests received after the close of the Subscription Period if such requests would positively contribute to the Project and can be accommodated without adversely affecting the filing process and/or anticipated in-service dates.

Parties interested in obtaining firm transportation service must submit an Open Season Shipper Nomination Form and necessary financial information (if a new Shipper) no later than 5:00 pm EST on February 8, 2016, by any of the following means:

By Mail/Express Mail/ Overnight Delivery to:
Open Season – 2017 System Expansion Project
Eastern Shore Natural Gas Company
1110 Forrest Avenue, Suite 201
Dover, DE 19904


By Fax to:
Attention: ESNG Open Season – 2017 System Expansion Project
(302) 734-6745


By Email to:  mpiper-afriyie@esng.com

New Shippers are required to provide the financial information set forth in Section 19 of Eastern Shore’s FERC Gas Tariff.  Eastern Shore reserves the right to request additional information as it deems necessary.

Eastern Shore reserves the right to make a final determination of the size, scope and cost of the 2017 Expansion Project as well as a final evaluation of the overall economics of the Project, and, in its sole discretion, decide whether or not to proceed.   All participating parties will be notified of Eastern Shore’s final decision.  Eastern Shore reserves the right to reject any or all nominations received.

A Shipper desiring to permanently reduce its existing firm year-round transportation service level must submit a Capacity Turn-Back Request, using the Form provided below.

Contacts for Additional Information

Should you have any questions or require additional information regarding this Open Season, please do not hesitate to contact:

Jackie Mayan
Sr. Manager,
Commercial Business &
and Marketing

(302) 213-7293

Michele Piper-Afriyie
Regulatory Analyst II

(302) 734-6710, ext 1043