ADDISON COUNTY — Vermont Gas Systems and International Paper Co. on Wednesday announced a $70 million pact through which the South Burlington-based utility would supply natural gas to the paper company’s Ticonderoga, N.Y., mill as soon as 2015.
The agreement, contingent on approval by the Vermont Public Service Board, calls for a 10.5-mile pipeline to be built under Lake Champlain as an offshoot of the Addison Natural Gas Project that has already been pitched to extend natural gas service south from Chittenden County into Vergennes and Middlebury.
Vermont Gas’s ultimate goal is to extend service all the way into Rutland County, and the proposed International Paper conduit “will support a larger and longer pipeline network, at no additional cost to our customers, and will help us to achieve our goal of bringing natural gas service to more Vermonters,” Vermont Gas President and CEO Don Gilbert said in a press release.
Vermont Gas is already working to design and permit the Addison Natural Gas Project, an undertaking that has earned conceptual support from the Middlebury selectboard. Meanwhile, International Paper officials have expressed an interest in acquiring a cheaper alternative to the fuel oil used to power boilers at its Ticonderoga mill. The company caused some controversy a few years ago when it proposed including shredded tires into its fuel mix.
Vermont Gas spokesman Stephen Wark said International Paper has agreed to bankroll the entire cost of its service pipeline, which would extend from the Addison Natural Gas Project pipeline just south of Middlebury and follow an as-yet-undetermined westerly corridor to Lake Champlain. There, a process known as “horizontal directional boring” would direct the pipeline under the lake and connect with the International Paper mill. Officials said it is an environmentally friendly technique that Vermont Gas has used with success to place pipeline under the Winooski and Missisquoi rivers, according to Wark.
Once connected to natural gas, International Paper is expected to save millions of dollars in fuel costs, according to project proponents. Currently, natural gas prices in Vermont are 44 percent less than fuel oil and 50 percent less than propane, according to Wark.
International Paper’s Ticonderoga mill has been in operation at its current location since 1970. Located on the western shores of Lake Champlain, the Ticonderoga mill is less than a half mile from Vermont. With 600 employees at the mill and more than 650 independent loggers and truckers in New York and Vermont who directly earn a living by harvesting and delivering wood, the mill is a significant economic driver in the region, Wark noted.
“I can’t overstate the importance of this agreement,” said Chris Mallon, Ticonderoga mill manager. “Our business is highly competitive and cost reduction projects such as this will help the long-term viability of the mill and retain jobs for the region. This agreement provides a unique opportunity for the mill to reap the benefits of a fuel that is much lower cost, while positioning us to significantly reduce greenhouse gas emissions.”
“This project will have a critical impact on the North Country economy, retaining hundreds of jobs in the region,” said Empire State Development President, CEO & Commissioner Kenneth Adams. “The North Country Regional Economic Development Council designated this project as a priority for the area, recognizing these critical improvements will help secure International Paper’s presence in the region and allow it to better compete in the paper mill industry. The state is committed to working with International Paper as a major employer in the region and applauds the partnerships involved, allowing this project to move forward.”
The Addison Natural Gas Project is currently in the engineering and permitting phase and is proposed to bring natural gas service to Middlebury in 2014.
“If all goes as planned we will be providing natural gas to the Ticonderoga mill in 2015,” Gilbert said.
Vermont Gas will submit requests for permits for the first stage of the Addison Natural Gas Project in December of 2012.
Reporter John Flowers is at [email protected].