Williams Partners L.P. (NYSE: WPZ) today announced it has received Federal Energy Regulatory Commission (FERC) approval to expand Transco, the nation's largest natural gas pipeline system, to provide service to a customer's new, gas-fired, power-generation plant in Virginia. A unit of Dominion (NYSE:D) plans to construct the 1,358-megawatt facility in Brunswick County, Va., to replace generating capacity from retiring coal-fired plants.
The approximately $300 million Transco Virginia Southside Expansion is designed to provide 270,000 dekatherms per day (dth/d) of incremental transportation capacity in Virginia and North Carolina by September 2015. Of the total expanded capacity, more than 90 percent will serve Dominion Virginia Power's new power plant; the remainder will serve Piedmont Natural Gas Company's (NYSE:PNY) local-distribution business in North Carolina.
The Virginia Southside Expansion is part of $2.2 billion of Transco growth projects that Williams Partners has previously announced it plans to bring into service between 2013 and 2017. Together, those projects are designed to increase Transco system capacity by more than 35 percent. The expansions, which consist of 11 projectsin nine eastern states, are designed to serve customers' demand for power generation, industries and local distribution.
"Our expansions of Transco over the last decade provide an impressive track record of our ability to execute on the growth opportunities that we and our customers create around this premier asset," said Alan Armstrong, chief executive officer of Williams Partners' general partner. "Since 2003, we have invested nearly $2 billion in 21 expansion projects that have increased Transco's transportation capacity by 55 percent.
"These vital infrastructure expansions connect the sizeable and growing markets along the Transco system with the new, long-lived natural gas reserves that the U.S. is blessed to have in abundant supply," Armstrong said.
"For WPZ unitholders, this Transco expansion is just one example of the $7 billion to approximately $8 billion of investments in growth projects we expect to make this year through 2015. Together, these projects are designed to grow the partnership in a way that continues to emphasize the foundation that growing fee-for-service revenues provides for the increased cash distributions we expect to make to our owners – including the majority-owner and general partner Williams," Armstrong said.
Frank Ferazzi, vice president and general manager of Williams Partners' Transco system described the project this way: "The Virginia Southside Expansion is a great opportunity for us to help these utilities serve the growing electricity-generation and gas-distribution needs in this region. We look forward to working with the FERC and all stakeholders to provide essential natural gas supply access in a manner that is efficient and takes great care all along the route."
The Virginia Southside Expansion is designed to consist of approximately 100 miles of new, 24-inch diameter pipeline extending from the Transco mainline in Pittsylvania County, Va., and into Halifax, Charlotte, Mecklenburg, and terminating in Brunswick County, Va. Transco's plan is to place the pipe in parallel to its own existing pipeline, alongside the existing utility corridor. In addition, Transco is adding more than 21,000 horsepower of compression at Station 165 in Pittsylvania County, Va.
The Transco pipeline is a 10,200-mile pipeline system that transports natural gas to markets throughout the northeastern and southeastern United States. Current system capacity is approximately 10.15 million dth/d, which is enough natural gas to serve the equivalent of more than 42 million homes.