RICHMOND — The proposed Atlantic Coast Pipeline has landed its first potential natural gas customer outside of Tidewater — the largest private employer in Buckingham County — on the eve of a pivotal vote by county planners on a proposed compressor station that has sparked intense public opposition.
Columbia Gas of Virginia is proposing to tap the pipeline in southeastern Buckingham to supply Kyanite Mining Corp. and other potential industrial customers on land the county would market for development under a set of pending legal agreements announced this week.
The pending agreements represent the first attempt west of Tidewater to draw natural gas from the pipeline proposed by a Dominion-led company to extend 600 miles from shale gas fields in West Virginia through the heart of Virginia to Hampton Roads and eastern North Carolina. The $5.1 billion project, proposed more than two years ago, is pending before the Federal Energy Regulatory Commission for action by late September.
"Buckingham County is a demonstration of the early fruit that can come from the pipeline," said Barry E. DuVal, president of the Virginia Chamber of Commerce, which staged a teleconference call in support of the project Thursday. "Hopefully, there will be more fruit to come."
Kyanite President Guy Dixon said the project would achieve a longtime goal of the 70-year-old mining company, which employs more than 150 people in a county of about 17,000. The company sees natural gas as a much cheaper and cleaner alternative to burning diesel fuel to power the massive burners that purify kyanite ore.
"In my view, it's doubleplus good," Dixon said in an interview Thursday. But the deal emerged less than a week before the Buckingham County Planning Commission is expected to vote on a special use permit proposed by Atlantic Coast Pipeline LLC for a 53,784 horse power compressor station that would boost pressure in the 42-inch-wide pipeline, raising concerns among opponents about the timing of the announcement.
"Now, in the face of strong evidence of harm to existing businesses, health impacts, property value losses related to the compressor station, isn't this timing suspect?" said Lakshmi Fjord in a statement on behalf of Friends of Buckingham, which has led opposition to the project.
"We hope that our political representatives in Buckingham and the owners of Kyanite will carefully consider this agreement only after they consider the special use permit on its separate considerable demerits for Buckingham's quality of life and business development," Ford said.
Dominion spokesman Aaron Ruby dismissed suggestions that the announcement was timed to coincide with the anticipated vote.
"In terms of timing, we've been in discussions with Buckingham, Columbia and Kyanite for two years now," Ruby said. "The announcement was made when we reached an agreement in principle with the parties."
"For more than two years, we've worked very hard to find opportunities across the region to expand access to natural gas in under-served communities, including Buckingham County," he said in a separate statement. "This is a great example of how the Atlantic Coast Pipeline can serve as an economic development tool for counties to support their local businesses and even attract new industries to help grow their economies."
The deal, made public by Buckingham County Attorney E.M. Wright Jr. in a briefing of the Board of Supervisors on Tuesday, is embodied in a set of agreements that would, when signed, set the terms for Columbia to install a tap and measuring-and-regulation station on the high-pressure gas pipeline at a cost estimated from $7 million to $8 million.
The gas would be transported by a lateral pipeline that would extend about 1.5 miles through property owned by Blue Rock Resources LLC, a real estate and timber subsidiary owned by Kyanite, to a still-undesignated 200-acre parcel that the company would give the county the option to buy to market for potential industrial customers that want access to natural gas.
The lateral would extend an additional half-mile through Kyanite land to the company's plant, which uses diesel-fueled burners to heat mined kyanite rock as part of a complex set of processes to extract iron and other impurities.
"This is just a great opportunity for us to benefit off the Kyanite and Columbia deal," Buckingham County Administrator Rebecca S. Carter said in an interview this week.
The county would contribute $260,000 toward the cost of the project and agree to pay $2,500 an acre for any land it would seek to purchase for a potential industrial customer on the property along U.S. 15 near Dillwyn.
The pending agreements include a memorandum of understanding among all of the parties involved in the deal — Atlantic Coast Pipeline, Columbia Gas, Kyanite and Buckingham — as well as an MOU between Kyanite and the county for the long-term option on the land.
The deal also would require Columbia to purchase an unspecified amount of transmission capacity on the pipeline, which already is 96 percent booked, primarily by Duke Energy and Piedmont Natural Gas in North Carolina and Dominion Virginia Power and Virginia Natural Gas for power plants and gas customers in southeastern Virginia.
It would expand Columbia's presence in its Buckingham franchise territory, where its sole customer is Dominion Virginia Power's Bear Garden power plant. The facility, located near the James River in the northeastern part of the county, is supplied by the Williams Transco interstate pipeline that crosses the county.
"It's a great opportunity," Columbia spokesman Robert C. Innes said. "It's an opportunity to expand [gas distribution] facilities in an area which otherwise has not had service."