Pennsylvania suspends all permit work for Energy Transfer

(Reuters) - Pennsylvania environmental regulators suspended all permit work for Energy Transfer LP after the company failed to comply with an October order following an explosion of the Revolution natural gas pipe in the western part of the state in September.

The company said the Pennsylvania Department of Environmental Protection (DEP) action on Friday did not affect operation of any pipeline that is in service or construction where permits have already been issued.

Energy Transfer said it is "committed to bringing the Revolution project into full compliance with all environmental permits and applicable regulations."

Revolution is a gas gathering pipeline that feeds into Energy Transfers' Rover gas pipeline and Mariner East natural gas liquids pipes. The explosion occurred on Sept. 10.

In October, the DEP ordered Energy Transfer to "stabilize disturbed areas" of Revolution and "prevent further erosion from the construction area." The DEP, however, said the company "had not fulfilled the terms of the order and was not progressing toward compliance."

Pennsylvania Governor Tom Wolf said in a statement the suspension will affect the in-service date for Revolution, which is currently not in service, and the Mariner East 2 pipeline. Part of Mariner East 2 went into service at the end of December.

The governor said there are 27 approvals currently under review by DEP for Mariner East 2. He said Revolution will remain closed until full compliance has been achieved.

Analysts at Height Capital Markets in Washington said they do not expect the suspension to delay the full startup of Mariner East 2 or 2X.

Officials at Energy Transfer were not immediately available to say when the remaining part of Mariner East 2 or 2X would enter service. In the past, the company said 2X would enter service in the second half of 2019.

Mariner East 1, meanwhile, remains out of service after the discovery of a sink hole near the pipe in January. The pipe was also shut in March due to sink holes.

Energy Transfer started work on the $2.5 billion expansion of Mariner East in February 2017 and had planned to finish the new 350-mile (563-kilometer) pipeline in the third quarter of 2017.

But completion was delayed by work stoppages by state agencies due to permit violations and other problems, including release of drilling fluids into waterways and the discovery of sinkholes.


(Reporting by Scott DiSavino; Editing by Paul Simao)