Fed Delay of Atlantic Sunrise Pipeline Adds to Williams Partners' Woes

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Fed Delay of Atlantic Sunrise Pipeline Adds to Williams Partners' Woes

Thu, 10/27/2016 - 09:51
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Atlantic Sunrise Expansion (copyright by Williams)
Atlantic Sunrise Expansion (copyright by Williams)

The federal authorization decision of a 318 km natural gas pipeline project in the eastern United States dubbed Atlantic Sunrise has been delayed at least until 30 March 2017 until outstanding environmental issues can be properly studied.

The Federal Energy Regulatory Commission (FERC) had originally planned to release the final Environmental Impact Statement (EIS) this week but said Thursday that additional information filed by Williams Partners’ Transcontinental Gas Pipe Line Co. LLC (Transco) to issue a draft general conformity determination for the Atlantic Sunrise Project with a 30-day comment period would necessitate a delay.

The estimated $3.1 billion pipeline would provide a new outlet for capacity-constrained Marcellus producers, extending its Transco pipeline into the northern Marcellus region, where it would connect gas supplies from that prolific shale play to customers along the east coast. But like other Northeast pipeline projects, the expansion has encountered organized opposition during the regulatory process.

News of the delay has caused "heartburn" for Williams, as Atlantic Sunrise is the largest project in Williams Partners' current project backlog. Further, it's one of the company's highest-return projects according to comments by CEO Alan Armstrong who said it is a "great project" with "great returns."

In addition to the robust project-specific economics, Atlantic Sunrise would unleash some 700 million cubic feet per day of gathering volumes that are currently shut-in because of the lack of pipeline capacity in the region.

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