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Atlantic Sunrise Moving Forward After Pennsylvania Issues Key Permits

Williams Partners LP’s Transcontinental Gas Pipe Line Co. LLC (Transco) has received long-awaited water crossing and earth disturbance permits for the Atlantic Sunrise pipeline project, paving the way for a sorely needed 1.7 Bcf/d expansion to serve natural gas producers in northeast Pennsylvania.

Williams said Thursday with the key permit approvals by the Pennsylvania Department of Environmental Protection (DEP), and an approved Section 404 permit from the U.S. Army Corps of Engineers, it plans to “immediately” request notice to proceed with construction from FERC. Construction could begin this fall and take 10 months, keeping Atlantic Sunrise on track for a mid-2018 in-service date.

Transco has executed binding precedent agreements with nine shippers, with Cabot Oil & Gas Corp. (1 Bcf/d), Chief Oil & Gas LLC (420 MMcf/d) and Seneca Resources Corp. (190 MMcf/d) contracting for the highest volumes. The Federal Energy Regulatory Commission certificated Atlantic Sunrise in February and the DEP issued the project’s Section 401 water quality certification (WQC) last year. 

Thursday’s announcement is especially welcomed by Cabot and Seneca, which have battled low regional gas prices on a lack of takeaway. The New York State Department of Environmental Conservation denied WQCs for both the Northern Access expansion project and the Constitution Pipeline, putting the projects in limbo and making Atlantic Sunrise that much more important for the companies.

Seneca recently added a rig to ramp-up Marcellus Shale development in Lycoming County, PA, to fulfill its commitment on Atlantic Sunrise, while the expansion is expected to help Cabot double its production to nearly 4 Bcf/d in the coming years, along with other takeaway it has secured in Susquehanna County, PA, where it operates.

The Pennsylvania permits were considered crucial for the nearly $3 billion Atlantic Sunrise project and had taken somewhat longer than expected to receive. The 200-mile greenfield portion of the project would cross 10 counties in the state, where Williams plans to install about 184 miles of pipe. It would expand the Transco system to move natural gas from northeast Pennsylvania to markets in the Mid-Atlantic and Southeast.

FERC on Monday authorized partial service to begin on a number of the project’s brownfield portions, providing for 400 MMcf/d of firm transportation to start on Sept. 1.

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