Norway's Norse Energy Corp. ASA said Monday it has received regulatory approval to sell two natural gas pipeline companies so that it can focus on exploration and production activities in the Marcellus Shale play in New York.

Norse spokesman Dennis Holbrook told NGI's Shale Daily on Tuesday that the New York Public Service Commission has approved the company's plans to sell two subsidiaries -- Norse Pipeline LLC and Nornew Energy Supply Inc. (NES) -- to Appalachian Transportation and Marketing LLC for $20.7 million. Norse and Appalachian had agreed to the deal in February.

"Our purpose for selling these companies was to focus on our Marcellus Shale holdings in western and central New York," Holbrook said. "When we first bought these pipeline systems and built up service on them, we were drilling other formations. We've decided to focus more on the shale opportunities [elsewhere]."

Norse CEO Mark Dice added that the pipelines -- which support conventional gas wells in Pennsylvania and New York -- are "no longer core to our exploration and production activities in central New York. This is part of our strategy to divest noncore assets on favorable terms and reallocate corporate resources toward our core competencies in exploration and production."

Norse said $4.2 million from the sale would go toward repayment of long-term debt associated with Norse Pipeline, and $16.5 million would be used for general corporate purposes. Holbrook said the deal is expected to close within the next week or two.

Norse Pipeline is a 320-mile gathering system able to connect to more than 6,500 wells in Erie, Crawford and Warren counties in northwest Pennsylvania and neighboring Chautauqua and Cattaraugus counties in western New York. The network was originally constructed as the Project Penny gathering system by Columbia Gas Transmission Corp. and connects to Tennessee Gas Pipeline at Mayville, NY, and the National Fuel Gas Supply pipeline at Little Valley, NY.

A 28-mile segment of the NES Pipeline connects Mayville and Jamestown, NY, and a four-mile-long gathering line runs to Faulkner, NY.

Commenting on the future of the pipelines, Holbrook said he believed Appalachian "is focused on both the potential of [conventional gas drilling into] existing formations in the Medina sandstone, but they are also hopeful that there will be other formations -- including the shales -- that will have potential access to the pipelines down the road."