AUGUSTA – The prospective buyer of a company planning to build a natural gas pipeline through the Kennebec Valley area plans to spend $150 million on a hugely expanded project.

Summit Natural Gas of Maine’s spending estimate is about $70 million more than planned by the project’s original owner, Kennebec Valley Gas Co.

The price’s near-doubling isn’t the only substantial change revealed in documents filed recently with the state. The pipe network is expected to deviate drastically from the Kennebec Valley Gas plan by starting in Windsor, not Richmond, and consisting of two high-pressure pipelines instead of one.

“As the economic development guys like to say, this is a game-changer,” said Michael Starn, Hallowell’s city manager.

The proposal was filed with the Maine Public Utilities Commission on June 1. The commission has set a June 26 deadline for petitions from the public.

The PUC must also approve the purchase and sale agreement.

The documents say Summit plans to invest $80 million in steel and large diameter pipe, while $70 million is slated for a network of distribution lines.

In sharp contrast, there’s now a substantial focus on residential customers. Municipal officials who have been briefed on plans by the company say Summit aims to serve 25,000 customers in its first five years. The proposal filed with the state estimates about 15,000 will be served after three years .

Summit’s chief operating officer, Eric Earnest, said his parent company, which also operates subsidiaries in Colorado and Missouri and is fully owned by a JPMorgan investment fund, is looking to double its nearly 35,000-person customer base with two projects in Maine alone.

The other project, Earnest said, is a proposed natural gas pipeline from Old Town to Millinocket that Summit hopes to build, own and operate.

Gov. Paul LePage’s office has advocated for a natural gas pipeline in that area to be built with private capital to fuel paper mills in the Millinocket area.

The company is seeking approval from the commission to build two pipelines from a tap on the Maritimes and Northeast Pipeline, which runs from Nova Scotia to Massachusetts. It passes through Windsor, just west of Augusta, a convenient tap-in spot.

From there, the company says it would build two high-pressure pipelines. One would go nearly 13 miles into Augusta. The other would go more than 52 miles north, as far as Madison, hooking into Somerset County mills.

Those two main pipelines would use distribution and service lines to link to as many as 17 communities in Kennebec and Somerset counties.

Earnest said the tax-break deals between most of the affected municipalities and Kennebec Valley Gas, which Summit inherited, are key to keeping rates low.

Belgrade approved the tax-increment financing agreement in last week’s election. Sidney and Richmond have not approved it and Farmingdale is set to vote on it later this month.

Kennebec Journal Staff Writer Michael Shepherd can be reached at 621-5632 or at:

mshepherd@mainetoday.com

 

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