UPDATE 1-U.S. OKs more ETP Rover natgas pipe drilling, Ohio wants pause

(Adds U.S. approval of eight horizontal drills)

Dec 14 (Reuters) - U.S. energy regulators on Thursday approved Energy Transfer Partners LP's request to resume horizontal drilling at eight sites in Ohio and West Virginia as it works to complete part of the Rover natural gas pipeline by the end of the year.

Those approvals come as the Ohio Environmental Protection Agency is seeking a pause in Rover's horizontal drilling in the state due to repeated spills of the clay-and-water mix used to lubricate the drilling blades.

The Ohio EPA asked the U.S. Federal Energy Regulatory Commission (FERC) for the pause on Nov. 24.

Officials at the Ohio EPA were not immediately available for comment on the latest FERC approvals.

Pipeline companies use horizontal directional drilling (HDD) to cross under large obstacles like highways and rivers.

Once complete, the $4.2 billion Rover will carry up to 3.25 billion cubic feet per day of gas from the Marcellus and Utica shale fields in Pennsylvania, Ohio and West Virginia to the U.S. Midwest and Ontario in Canada.

One bcfd of gas can supply about 5 million U.S. homes.

In a letter filed with FERC late on Wednesday, ETP said the Ohio EPA "grossly mischaracterizes Rover's activities."

ETP said the five spills identified by the Ohio EPA in its Nov. 24 request were at two locations, Captina Creek and Black Fork Mohican, and not "significant" in size, the biggest being an estimated 1,188 gallons (4,500 liters) at Captina Creek on Oct. 11.

Earlier on Thursday, Ohio EPA spokesman James Lee said by phone there have been two additional spills since Nov. 24, the biggest being an estimated 350 gallons.

ETP said in its letter that Rover was in compliance with the FERC-approved plan that allowed the company to start horizontal drilling again in September.

FERC banned ETP from new horizontal drilling in May following a spill of around 2 million gallons (7.6 million liters) into the Tuscarawas River wetland in Ohio. There were traces of diesel found in that spill, which is the subject of a separate FERC investigation. Diesel was not allowed in the drilling fluid.

Resumption of drilling under the Tuscarawas River was included in the eight horizontal drills allowed by FERC on Thursday.

ETP said that Rover was more than 95-percent complete and it expects to finish the first phase of the project in Ohio by year-end and the second phase from Ohio to Michigan by the end of the first quarter.

In late November, ETP said it had only the Captina Creek drill left to finish to complete phase 1B of the project from Seneca to Cadiz in southeast Ohio.

The company finished the 225-mile (362 km) phase 1A from Cadiz to Defiance in northwest Ohio in August. Flows on the pipe peaked at 0.8 bcfd in November, according to Reuters data.

ETP said Thursday it completed 29 of the 49 horizontal drills for the entire project.

Major gas producers that have signed up to use Rover include units of privately held Ascent Resources LLC, Antero Resources Corp, Range Resources Corp, Southwestern Energy Co, Eclipse Resources Corp and EQT Corp.

(Reporting by Scott DiSavino; Editing by Richard Chang and Sandra Maler)