Wednesday, March 7, 2012
Williams Partners notes progress on natural gas supply hub in Pennsylvania
TULSA, Okla. - Williams Partners L.P. (NYSE: WPZ) on Feb. 21 announced two major milestones in its strategy to create a major natural gas supply hub in northeastern Pennsylvania.
Williams (NYSE: WMB) owns 72 percent of Williams Partners.
The new 120-mile Constitution Pipeline will connect Williams Partners' gathering system in Susquehanna County, Pa., to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, NY. Williams Partners will own 75 percent of Constitution Pipeline and, through its affiliates, will provide construction, operation and maintenance services for the new pipeline. Cabot will own the remaining 25 percent.
The new pipeline will initially be designed to transport at least 500,000 dekatherms per day of Cabot's Marcellus production, but will be expandable to meet growing demand for takeaway capacity in northeast Pennsylvania.
Constitution Pipeline will be regulated by the Federal Energy Regulatory Commission (FERC). Williams Partners expects to initiate the FERC application process soon.
Williams Partners also has completed the acquisition of the Laser Northeast Gathering System and other midstream businesses from Delphi Midstream Partners, LLC. The original acquisition along with additional pipeline construction was funded with $329 million in cash and approximately 7.5 million Williams Partners units.
These two projects are key steps in Williams Partners' strategy to create the Susquehanna Supply Hub, a major natural gas supply hub in northeastern Pennsylvania.
By 2015, Williams Partners expects the Susquehanna Supply Hub to be capable of delivering more than three billion cubic feet per day (Bcf/d) of Marcellus Shale production into four major interstate gas pipeline systems.
"We are developing all the key elements of a major new supply area hub, where we can provide Marcellus Shale producers in northeast Pennsylvania with a large-scale gathering system that has significant takeaway capacity to the best available markets," said Alan Armstrong, chief executive officer of Williams Partners' general partner. "It's key to our strategy of providing large-scale infrastructure and continuing to build on our significant fee-based midstream and gas pipeline businesses."
Williams Partners' gathering system in northeastern Pennsylvania currently covers three counties and has a capacity of 750 million cubic feet per day (MMcf/d). With the recent start-up of the Springville pipeline, it is now connected to three major interstate gas pipeline systems - Williams Partners' Transco system, Tennessee Gas Pipeline and Millennium Pipeline.