Atlantic Coast Pipeline signs pipe manufacturing contract

Atlantic Coast Pipeline LLC, which has proposed a 550-mile natural gas pipeline to bring much-needed energy to Virginia and North Carolina, today announced an agreement totaling more than $400 million with Dura-Bond Industries to produce steel pipe for the project.

Pending approval by the Federal Energy Regulatory Commission (FERC), the Atlantic Coast Pipeline (ACP) would run from Harrison County, W.Va., southeast through Virginia with a lateral extension to Chesapeake, Va., and then south through eastern North Carolina to Robeson County. If approved, construction is scheduled to start in late 2016.

Dura-Bond, which ACP LLC selected after an extensive bidding process, is scheduled to produce the pipe at its Steelton, Pa., mill beginning late 2015 through March 2017. Dura-Bond plans to hire about 150 employees at the mill to run a second shift of union workforce to meet the schedule.

“We are excited to work with Dura-Bond, one of the nation’s premier suppliers of gas transmission pipeline,” said Diane Leopold, president of Dominion Energy. “Dura-Bond has an outstanding reputation in the industry and has been a long-term supplier of pipe and pipe coating for Dominion’s gas transmission business, dating back to the 1970s.

“This contract alone will provide significant economic growth to the region, beyond cleaner air, lower customer bills and jobs,” Leopold added.

The ACP joint venture reached the agreement with Dura-Bond prior to FERC approval because of the long lead time needed to buy raw materials and to get a guaranteed production schedule for this large amount of new pipe. ACP expects to file its FERC application late this summer, receive its FERC certificate in the summer of 2016 and begin construction shortly thereafter. The pipeline is expected to be in service by late 2018.

Producing about 540 miles of pipe ranging from 30 to 42 inches outside diameter is the largest single order in Dura-Bond’s history, said Dura-Bond Vice President Jason Norris.

“We are extremely pleased with such a large pipe order, and are proud that the Atlantic Coast Pipeline partners have the faith and trust in us,” said Norris. “Since 2006, we’ve produced nearly 200 miles of pipe for Dominion and are excited to secure this tremendous order. We have a lot of work ahead of us and we will be up for the task.

“This is a great example of how the growth in the Marcellus Shale impacts the economy,” added Norris.”This increase in activity at Dura-Bond also means more business for our local suppliers who we depend on and support whenever we can, so the trickle-down effect will be significant.”

In a separate transaction, Dominion signed an agreement with Dura-Bond to produce 39 miles of additional 36-inch and 30-inch outside diameter steel pipe for the company’s Supply Header Project in West Virginia and Pennsylvania, which has the ACP as its primary customer. The Supply Header project schedule is the same as for the ACP.

Atlantic Coast Pipeline LLC is composed of four major U.S. energy companies – Dominion, Duke Energy (NYSE: DUK), Piedmont Natural Gas (NYSE: PNY) and AGL Resources (NYSE: GAS). The joint venture partners plan to build and own the $4.5 billion-to-$5 billion pipeline, which would help meet the growing clean energy needs of Virginia and North Carolina by providing direct access to the burgeoning natural gas production in the Marcellus and Utica shale basins of West Virginia, Pennsylvania and Ohio.