By Scott DiSavino
NEW YORK, Sept 9 (Reuters) – The U.S. Third Circuit Court of Appeals reversed a key New Jersey water permit for U.S. energy company Williams Cos’ long-delayed Northeast Supply Enhancement (NESE) natural gas pipeline project in Pennsylvania, New Jersey and New York.
The court said in a ruling on Tuesday that it granted petitions by environmental groups, vacated the Water Quality Certification and remanded the case to the New Jersey Department of Environmental Protection (NJDEP).
A coalition of environmental groups filed a lawsuit last November against the NJDEP for unjustifiably approving the certification for NESE, after first rejecting the project in 2019 for failure to demonstrate compliance with state water quality standards.
“When the water quality certificate was denied in 2019, that should have been the end of it,” said Charlie Kratovil, Central Jersey Organizer at Food & Water Watch, one of the environmental groups opposing the project.
Officials at Williams were not immediately available for comment.
NESE is a roughly $1 billion project under construction by Williams’ Transcontinental Gas Pipe Line Co (Transco) unit that would expand the existing Transco gas pipe. NESE includes the construction of an offshore pipe in the Raritan Bay between New Jersey and New York.
The environmental groups contended that the underwater segment would require dredging the bay floor, stirring up sediment containing toxic contaminants like mercury and PCBs (Polychlorinated biphenyls), which could pose risks to human health and marine habitats.
Williams officially broke ground on NESE in Brooklyn, New York, in April 2026.
In addition to NESE, Williams is also developing another long-delayed gas pipe in the region, Constitution Pipeline from Pennsylvania to New York.
Both projects were controversial in part because they were previously rejected by state environmental regulators and canceled by Williams in past years before U.S. President Donald Trump sought their revival after returning to office in 2025.
Williams canceled Constitution in 2020 and NESE in 2024 after years of fighting for permits, especially water permits, from state regulators in New York and New Jersey.
In May 2025, the Trump administration used New York’s reconsideration of Williams’ proposed gas pipes in the state as part of a deal with New York Governor Kathy Hochul to lift a federal ban on construction of Norwegian energy firm Equinor’s Empire Wind offshore wind farm off New York.
Hochul did not agree to approve either pipe project but said the state would work with the U.S. administration and private entities on projects that meet the legal requirements under New York law.
Williams said on its website that it targeted completion of NESE in the fourth quarter of 2027 and Constitution in the fourth quarter of 2028.
NESE is designed to move around 0.4 billion cubic feet per day (bcfd) of gas from Pennsylvania, across New Jersey and into New York.
Constitution, which is not under construction, is designed to move around 0.65 bcfd of gas from Pennsylvania to New York.
One billion cubic feet of gas is enough to supply around five million U.S. homes for a day.
(Reporting by Scott DiSavino, Editing by Nick Zieminski)
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