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Shippers Sign Up for Transco Marcellus-to-Georgia Expansion

Prospective shippers have stepped up for 448,000 Dth/d of firm capacity offered by Williams Partners LP's Transco pipeline on its Dalton Expansion Project, which would carry Marcellus Shale gas to markets in northwest Georgia. AGL Resources Inc. has said it will help fund the Georgia lateral portion of the project.

The binding shipper commitments represent 100% of the project's capacity, Williams Partners said. However, almost two years ago the company said Dalton was envisioned as up to a 600,000 Dth/d project (see Shale DailyJune 1, 2012).

Both incremental power generation demand for gas as well as local distribution company load will be served by the project, Williams Partners said last Friday.

"The Dalton Expansion Project is one of six large-volume projects Transco is pursuing to connect approximately 3.4 million Dth of natural gas from surging supplies in the Northeast to high-value growth markets in the Southeast," said Rory Miller, senior vice president of Williams Partners' Atlantic-Gulf operating area.

The Dalton project would expand Transco's mainline from its Station 210 in New Jersey to points as far south as Holmesville, MS, and add a 106-mile lateral pipeline from Transco's Station 115 to Murray County, GA. Also included in the proposal is a new compressor facility in Carroll County, GA, as well as three new metering facilities and other related pipe and valve modifications to existing facilities. Transco's net investment in the whole project is expected to be $275 million.

Williams Partners and Atlanta-based AGL agreed for each company to hold a 50% undivided joint ownership in the lateral portion of the project in Georgia. AGL would lease its ownership interest in the lateral to Transco. The agreements between Williams Partners and AGL are subject to board approvals.

The lateral will serve roughly 1 million customers of AGL's Atlanta Gas Light Co. LDC in the core of the utility's service territory, AGL Resources' Tim Sherwood, vice president of gas supply operations, told NGI's Shale Daily. The lateral is the first capacity that the company is developing to explicitly access Marcellus gas, he said.

However, AGL utilities such as Elizabethtown Gas in New Jersey and Virginia Natural gas have benefited from Marcellus supplies via Transco's Leidy Line. AGL utilities have used backhauls on Transco to get gas into Atlanta, for instance, Sherwood said. "But this is the first kind of project that we've been involved with that was designed to provide access to that growing area of supply.

Sherwood said it is too soon to tell whether there will be similar projects to benefit Atlanta Gas Light or other AGL utilities with Marcellus supply, but it wouldn't be surprising if there were. "The main thing for us is to focus on consumer benefits for the LDC customers. In the case of Dalton, anyway, this project really did that well for us," Sherwood said, adding that traditionally Atlanta Gas Light has accessed supplies from the Gulf Coast region.

"It also provided a greater balance between our two primary interstate pipeline suppliers: Southern Natural and Transco. And because of the nature of the project with it utilizing so much of Transco's existing system in a more efficient manner allowed us to do that at a real cost-effective way as far as capacity costs were concerned.

"In the event we find other opportunities to do the same thing, either at Atlanta or at other utilities, we would certainly investigate it. I would tend to think that given the growing amount of gas supply up in that area, other opportunities will present themselves, but to date we don't have any capacity projects that our LDCs are participating in at this time."

Dalton construction is planned to begin in April 2016 with completion targeted for 2017, subject to approvals by regulatory agencies, including FERC. Williams Partners has submitted its pre-filing request to the Federal Energy Regulatory Commission for the project.

"By year-end 2017, we expect to add more than 50% to Transco's system capacity with mainline expansions that include the Dalton Expansion Project, Atlantic Sunrise, Leidy Southeast, Virginia Southside and others to meet the increasing demand for natural gas in the region," Miller said.

In February, Williams Partners said Transco had received binding commitments from producers, local distribution companies and power generators for 100% of the 1.7 million Dth of firm transportation capacity on its proposed Atlantic Sunrise expansion project to serve demand centers along the Atlantic Seaboard (see Shale DailyApril 11Feb. 20).

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