Capacity increase progress for Transco gas pipeline

Source:Williams Partners

The Transco pipeline is the nation's largest-volume interstate natural gas pipeline system. Williams Partners' (NYSE:WPZ) Transco reported a key regulatory milestone on two related projects designed to increase natural gas delivery capacity to Brooklyn and Queens in time for next winter's heating season.

The Transco pipeline is the nation's largest-volume interstate natural gas pipeline system; it is a major supplier of natural gas to New York City. Customers in a dozen states along the 1,800-mile pipeline route spanning South Texas to New York City receive natural gas shipped on the Transco system.

The Federal Energy Regulatory Commission on Feb. 28 published its final environmental review of Transco's Rockaway Lateral and Northeast Connector expansions. The FERC action is a key step toward the commission's decision on the projects, which is expected this spring. Transco would expect to begin construction in May and bring the projects into service in November this year.

The Rockaway Lateral and Northeast Connector are among some $5 billion of energy-infrastructure investments that Williams Partners expects to make in the Transco system over the 2013 to 2017 time frame to connect growing market demand with new natural gas supplies. Those expansions are designed to add more than 50 percent to Transco's capacity to deliver natural gas.

"It is heartening to see the FERC continue to take action on a timeline that will allow New York City to benefit from additional natural gas supply and increased system reliability in time for the next winter heating season," said Rory Miller, senior vice president of Williams' Atlantic-Gulf operating area. "New York City recognizes these projects as high-priority, critical infrastructure that add natural gas delivery capacity and reliability in support the city's significant progress toward meeting clean-air goals. As well, residents and owners of buildings upgraded to natural gas heating continue to enjoy meaningful savings compared with heating oil.

"We are committed to constructing and operating these projects in a timely, responsible, environmentally sensitive manner," Miller said.

This winter already has been a record-setter for Transco, with peak-day delivery records on three separate occasions. On those days, the demand for natural gas deliveries on Transco's system was above and beyond the peaks that were attributed to the effect of the Polar Vortex and other brutal cold weather across all of the pipeline's market areas.

On its Rockaway Lateral and Northeast Connector projects, Williams Partners plans to spend approximately $280 million for 3.2 miles of new Transco pipeline and related facilities in New York, as well as equipment to increase compression at three existing Transco facilities in New Jersey and Pennsylvania. With a daily delivery capacity of 647,000 dekatherms, the Rockaway Lateral will provide an additional supply-delivery connection into the National Grid distribution system, which delivers natural gas to 1.25 million customers in Brooklyn and Queens.

The Rockaway Lateral is designed to enhance the security and reliability of supply for Transco's customer, National Grid. It also increases by about 10 percent the amount of natural gas that the Transco system can deliver to National Grid.

Ahead of the these two projects, Transco's most recent expansion of natural gas delivery capacity in the Northeast U.S. came online last fall, in the early days of the current winter heating season. That project, the Northeast Supply Link, was Transco's first major expansion specifically designed to deliver new natural gas supplies from the Marcellus production area. In response to demand from customers in Pennsylvania, New Jersey and New York, Transco brought half of that project's 250,000 dekatherms of daily delivery capacity online three months ahead of schedule.

For the Rockaway Lateral, Transco made its initial regulatory filing with the FERC in March 2009 and last year filed its certificate applications for both projects.

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