Williams to build Marcellus shale gas line, establish supply hub

Williams Partners LP has entered into a joint venture with Cabot Oil & Gas Corp. to build the 120-mile Constitution Pipeline, connecting Williams Partners’ natural gas gathering system in Susquehanna County, Pa., to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, NY. Constitution will transport at least 500 MMcfd of Cabot's Marcellus shale production, but will be expandable to meet growing demand for takeaway capacity in northeast Pennsylvania.

Williams will own 75% of the Constitution system and, through its affiliates, will  provide construction, operation, and maintenance services. Cabot will own the remaining 25%. Williams expects to start the application process with the US Federal Energy Regulatory Commission soon and is holding an open season to gauge additional interest in the line.

Williams also completed its 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 about 7.5 million Williams Partners units (OGJ Online, Dec. 28, 2011).

Williams described these two projects as key steps in its strategy to create the Susquehanna Supply Hub, a major natural gas supply hub in northeastern Pennsylvania. Williams expects the hub to deliver more than 3 bcfd of Marcellus shale natural gas into four major interstate gas pipeline systems by 2015.

Williams Partners' gathering system in northeastern Pennsylvania currently covers three counties and has a capacity of 750 MMcfd. 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. Cabot’s Marcellus production had been constrained at 400-420 MMcfd prior to the Springville line’s commissioning (OGJ Online, May 25, 2011).

Williams Partners and Cabot reached a 25-year gathering agreement covering 138,000 gross acres in the northeast Pennsylvania area of the Marcellus shale in November 2010 (OGJ Online, Nov. 19, 2010).

Contact Christopher E. Smith at chriss@ogjonline.com.

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