The 110-mile pipeline project would cross the Lehigh Valley in Pennsylvania and go into Hunterdon County in New Jersey.
One of the six companies that has partnered on the $1 billion PennEast pipeline project will increase its stake by buying the 10 percent share being sold by Public Service Electric & Gas.
With the deal, Spectra Energy Partners will increase its equity investment in the 110-mile natural gas pipeline from 10 percent to 20 percent, PennEast Pipeline Co. announced Monday.
PSE&G, New Jersey's largest utility company, said last week that it would sell its minority ownership to focus on its core business of power generation.
The 36-inch-wide pipeline would carry natural gas from the Marcellus Shale region in Luzerne County, Pa., through the Lehigh Valley into Hunterdon and Mercer counties in New Jersey. A connector pipeline will then link it to an existing compressor in West Amwell Township.
Spectra Energy Partners has a purchase and sale agreement to acquire PSE&G's shares, the pipeline company said. The acquisition is expected to close in the second quarter of this year pending approval by the PennEast board, said PennEast spokeswoman Patricia Kornick.
PennEast won't reroute through Bucks County
Terms of the deal were not disclosed. Spectra Energy's pending purchase means that each of the five energy companies that will now make up PennEast Pipeline Co. will have equal 20 percent stakes in the project.
"PennEast views this as a very positive step," Kornick said. "It's another sign that shows the member companies recognize this as critical for the mid-Atlantic region."
Bill Yardley, president of Spectra Energy Partners, said the deal enables Spectra Energy to solidify its regional profile.
"From its inception, we have viewed the PennEast Pipeline as a critical project for the mid-Atlantic, connecting abundant domestic supplies to growing local markets in need of additional clean natural gas," Yardley said in a statement. "PennEast provides an opportunity to build upon our very strong footprint in the region."
Critics have assailed the pipeline plan, charging it will cause pollution, disrupt preserved open space and beef up costs on consumers.
Tom Gilbert, campaign director of pipeline opponent ReThink Energy NJ, said the transaction was motivated by profit and not need.
"If there were a real need for PennEast, we would expect companies not already involved in this self-serving, profit-making scheme to be knocking down the door to purchase PSE&G's share," Gilbert said in a news release. "Instead, Enbridge/Spectra will buy it, reinforcing the self-dealing nature of the project and the fact that there is no evidence of public need for it."
Spectra Energy merged with Enbridge Inc. earlier this year.
Officials have said the pipeline is on schedule to be operational in the second half of 2018; PennEast hopes to receive the Federal Energy Regulatory Commission's environmental impact statement, or EIS, next month.
While PSE&G is divesting its ownership in the pipeline, it will continue to rely on the pipeline to move natural gas and will be the pipeline's second-largest customer, behind New Jersey Natural Gas, company officials said.
Once Spectra Energy Partners' acquisition is complete, it will share ownership with NJR Pipeline Co., SJI Midstream, Southern Company Gas, and UGI Energy Services.
Jim Deegan may be reached at jdeegan@lehighvalleylive.com. Follow him on Twitter @jim_deegan. Find lehighvalleylive on Facebook.