National Fuel Gas Co. keeps looking for ways to expand its pipeline business after state regulators earlier this year blocked an expansion of a pipeline route through New York.
The Amherst-based energy company is holding talks with potential partners on projects that would help it move gas out of its drilling fields in Pennsylvania to new markets, following a route that "avoids the permitting pitfalls" in New York, said Ronald J. Tanski, National Fuel's president and CEO.
National Fuel has filed a lawsuit challenging the state Department of Environmental Conservation's decision earlier this year to reject a water quality permit for its Northern Access pipeline project that would have run from Pennsylvania to Canada.
In the meantime, National Fuel is moving forward with a plan to expand the capacity of its Empire Pipeline, mainly by upgrading the compressors on the route. The $135 million project, which is scheduled to be completed in November 2019, could face an easier regulatory path because it does not require a water quality permit, Tanski said.
Tanski's comments came in a conference call after National Fuel reported fourth-quarter profits that increased by 21 percent, mainly because last year's earnings were hurt by a write-down of some of its oil and natural gas assets. Excluding that write-down, National Fuel's profits fell to 53 cents per share from 66 cents per share a year ago, but that still topped analyst estimates by a penny.
National Fuel said its oil and natural gas production inched up by 1 percent during the quarter, even though it curtailed development of 2.5 billion cubic feet of natural gas in its Pennsylvania drilling fields because of low prices.
The company said it expects low energy prices to hurt its profits during the fiscal year that began in October, mainly because financial hedges that had offset some of the impact from the price drop have expired and no longer will bolster its earnings.
National Fuel said it expects to earn $2.75 to $3.05 per share, down from $3.30 per share during the previous fiscal year. The company expects its oil and natural gas production to rise by about 10 percent to between 185 billion to 200 billion cubic feet, up from 173 billion cubic feet during the previous fiscal year.