TULSA, Okla.--(BUSINESS WIRE)-- Williams Partners L.P. (NYSE: WPZ) today announced two major milestones in its strategy to create a major natural gas supply hub in northeastern Pennsylvania. Williams (NYSE: WMB) owns 72 percent of Williams Partners.
Williams Partners is announcing a new interstate gas pipeline joint venture with Cabot Oil & Gas Corporation (NYSE:COG). The new 120-mile Constitution Pipeline will connect Williams Partners' gathering system in Susquehanna County, Pa., to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, NY. Williams Partners will own 75 percent of Constitution Pipeline and, through its affiliates, will provide construction, operation and maintenance services for the new pipeline. Cabot will own the remaining 25 percent.
The new pipeline will initially be designed to transport at least 500,000 dekatherms per day of Cabot's Marcellus production, but will be expandable to meet growing demand for takeaway capacity in northeast Pennsylvania. See the information below about an open season to gauge additional shipper interest.
Constitution Pipeline will be regulated by the Federal Energy Regulatory Commission (FERC). Williams Partners expects to initiate the FERC application process soon.
Williams Partners also has completed the acquisition of the Laser Northeast Gathering System and other midstream businesses from Delphi Midstream Partners, LLC. The original acquisition along with additional pipeline construction was funded with $329 million in cash and approximately 7.5 million Williams Partners units.
Susquehanna Supply Hub
These two projects are key steps in Williams Partners' strategy to create the Susquehanna Supply Hub, a major natural gas supply hub in northeastern Pennsylvania.
By 2015, Williams Partners expects the Susquehanna Supply Hub to be capable of delivering more than 3 billion cubic feet per day (Bcf/d) of Marcellus Shale production into four major interstate gas pipeline systems.
"We are developing all the key elements of a major new supply area hub, where we can provide Marcellus Shale producers in northeast Pennsylvania with a large-scale gathering system that has significant takeaway capacity to the best available markets," said Alan Armstrong, chief executive officer of Williams Partners' general partner. "It's key to our strategy of providing large-scale infrastructure and continuing to build on our significant fee-based midstream and gas pipeline businesses."
Williams Partners' gathering system in northeastern Pennsylvania currently covers three counties and has a capacity of 750 million cubic feet per day (MMcf/d). With the recent start-up of the Springville pipeline, it is now connected to three major interstate gas pipeline systems - Williams Partners' Transco system, Tennessee Gas Pipeline and Millennium Pipeline.
Constitution Pipeline Open Season In addition to Cabot's commitment as an anchor shipper on the new pipeline, an open season offering of firm transportation capacity will be held by Constitution Pipeline from today to March 12, 2012, to gauge any further shipper interest. Information on the open season can be found at www.williams.com/constitution