National Grid, Constellation Energy agree on LNG supply deal for Massachusetts (U.S.) facility

(Reuters) - Britain's National Grid said it reached an agreement with gas-supplier Constellation Energy that would allow it to keep operating its Everett gas-import terminal for six years.

The Everett, Massachusetts, facility supplies natural gas to power plants and other utilities across New England. It was set to close with the May retirement of Constellation's Mystic Generating Station, a gas-fired power plant.

"The agreement will maintain a reliable and available supply of LNG for National Grid's 950,000 residential and business natural gas customers during peak heating demand days," National Grid said in a statement.

Massachusetts has to approve the agreement by May 1 to assure the Everett terminal continues to operate.

In November, Federal Energy Regulatory Commission Chairman Willie Phillips and North American Electric Reliability Corp CEO James Robb wrote that there were concerns about local gas utilities' "ability to ensure reliability and affordability in the region without Everett."

The two firms asked the state to expedite hearings on requests to keep the terminal open that would raise residential heating bills by about $3.30 per month in the first year's winter months, and between .3% and 1% in contract years two through six.

"The agreement is the most viable alternative available for meeting peak demand between now and 2030, while avoiding the need to build new gas infrastructure," National Grid said.

 

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