Vermont Gas Systems said it will not go ahead with its proposal to construct phase 2 of its planned pipeline expansion project in the US.
The second phase was planned from Middlebury to the International Paper’s facility in Ticonderoga, New York.
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International Paper had agreed to pay the entire cost of the second phase and part of the cost of phase 1. However, when the price for phase 2 went from $99m to $135m, International Paper elected to withdraw from the deal.
Vermont Gas president and CEO Don Rendall said: "As the company committed to the Vermont Public Service Board last year,Vermont Gas recently completed a thorough review of the schedule, costs and challenges to complete Phase 2 under current business conditions.
"IP and Vermont Gas extensively discussed the issues raised by this reassessment of the project, and we were unable to find a mutually acceptable path forward."
The move will not affect phase 1’s certificate of public good or cost estimate.
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By GlobalDataThe Vermont Public Service Board evaluated the first phase as a stand-alone project, without phase 2.
Vermont Gas updated cost estimate for phase 1, which was released in December 2014.
Vermont Gas vice president for system expansion Jim Sinclair said: "We will now focus our efforts on completing Phase 1 of our expansion plan to serve Addison County as far south as Middlebury and explore creative options for extending service to more Vermont communities, including Rutland."
