Kinder Morgan Inc. said it will still try to build a 188-mile natural gas pipeline across Massachusetts and New Hampshire even though it has failed to line up prospective customers for more than half of its capacity.
The Houston company has not fixed a size for the pipeline but has estimated its capacity at 1.3 billion to 2.2 billion cubic feet of natural gas a day. So far, Kinder Morgan has contracts to ship only about 550 million cubic feet a day.
Even so, on Thursday the company said its board of directors had authorized the project to continue; earlier in the week Kinder Morgan told analysts the Massachusetts pipeline was on a list of projects the company was reasonably sure it would complete.
In a conference call with analysts and investors on Wednesday, Kinder Morgan executives were optimistic they will be able to sign up more customers for the pipeline.
“The overwhelming need for additional gas capacity to serve Northeast markets” could bring more customers, said company president and CEO Steve Kean. “We think that getting out there with our customers, telling them that we’re going forward, is going to help in the additional sign-ups that we need.”
The network of pipelines that supply New England with natural gas has become constrained as more power plants in the region use gas to generate electricity. Last winter, concerns about gas shortages sent electricity prices surging in Massachusetts.
Estimates differ on how much additional natural gas the region needs. A business and labor coalition pegged the need at 2 billion cubic feet more every day, while a study by the Deval Patrick administration released in January said the number was closer to 600 million or 800 million.
Attorney General Maura Healey will conduct her own study this fall.
The Kinder Morgan pipeline is one of four such projects vying to bring more natural gas to New England. A smaller pipeline expansion by Spectra Energy Corp., of Houston, has already been approved by federal regulators and is under construction in the Boston area. Spectra is involved in two other pipeline projects that, like the Kinder Morgan project, are in the planning stage.
One of those, Access Northeast, a joint venture between Spectra and the utilities Eversource Energy and National Grid, said it has commitments for most of the capacity of its project, which involves expanding two pipelines that serve New England.
But John Edwards, a Credit Suisse analyst who follows energy companies, said in a note to investors Wednesday that Kinder Morgan will probably land more customers and that it was “sufficiently probable” the company will build it if regulators give the go-ahead.
In June, Kinder Morgan said it would reroute the pipeline so it would cross less private land, to avoid costly battles with property owners and neighbors. Beginning in Wright, N.Y., near Albany, it would run through Western Massachusetts to Northfield, turn north into New Hampshire, and then head east, ending in Dracut.
The proposal still faces opposition in Western Massachusetts. One critic questioned how Kinder Morgan could get the pipeline approved without having more customers for its gas.
“It’s like they’re trying to puff it up and to make it look like the thing’s really going to happen,” said Katy Eiseman, the head of a group called Massachusetts Pipeline Awareness Network that opposes the project. “They don’t seem to have any sound basis.”Jack Newsham
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