Williams seeks FERC approval for pipeline expansion

Williams (NYSE: WMB) said March 19 that Transco has filed an application with the US Federal Energy Regulatory Commission (FERC) for its Dalton Expansion Project, which would support providing Marcellus shale gas to the Southeast for electricity generation and local natural gas distribution.

Transco, an interstate natural gas pipeline system, is a wholly owned subsidiary of Williams Partners LP (NYSE: WPZ), of which Williams owns controlling and general-partner interests.

Transco has executed long-term agreements with shippers for 100% of the 448,000 dekatherms of firm transportation capacity to be created under the Dalton Expansion Project. The project will consist of an expansion of Transco’s mainline from its Station 210 in New Jersey to points as far south as Holmesville, Mississippi, and a new 111-mile lateral pipeline from Transco’s Station 115 to Murray County, Georgia. Also included in the expansion is a new compressor facility in Carroll County, Georgia, as well as three new metering facilities and other related pipe and valve modifications to existing facilities.

To fund the lateral pipeline portion of the project, Williams Partners’ Transco and AGL Resources’ Dogwood Enterprise Holdings Inc. have entered into an ownership arrangement whereby each party will hold a 50% undivided joint ownership interest in the lateral pipeline in Georgia. Under the proposal, Dogwood Enterprises will lease its ownership interest in the lateral to Transco. Transco’s net investment in the project is expected to be approximately $275 million.

Williams and AGL Resources initially disclosed their intent to develop the project in March 2014. Siting and environmental studies have been under way since that time, and the March 19 announcement signifies the beginning of the FERC approval process. Construction is planned to begin in the third quarter of 2016, with completion targeted for 2017, subject to all necessary or required approvals by FERC and all other regulatory bodies.

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