Transco seeks FERC approval for $472m gas pipeline project

Transcontinental Gas Pipe Line Co. LLC (Transco) applied March 19 with the Federal Energy Regulatory Commission for a certificate of public convenience and necessity to construct and operate its Dalton Expansion Project.

The project will enable Transco to provide 448,000 dekatherms per day (dt/day) of incremental firm transportation capacity from Transco’s Station 210 Zone 6 Pooling Point in Mercer County, New Jersey, along Transco’s mainline to Transco’s interconnection with Gulf South Pipeline Co. LP at Holmesville in Pike County, Mississippi, and through a new pipeline lateral (called the “Dalton Lateral” ), initiating at Transco’s Compressor Station 115 in Coweta County, Georgia, to interconnections on the Dalton Lateral in northwest Georgia.

Transco requests that the commission issue a final order granting these authorizations by March 1, 2016, which will enable Transco to maintain the construction schedule required to meet the May 1, 2017, target in-service date for the project.

The project delivery points include points of interconnection with Atlanta Gas Light Co. in Bartow and Murray counties, Georgia, and Oglethorpe Power Corp.’s Thomas Smith Plant in Murray County, Georgia. In addition, a new, 21,830 horsepower compressor station (“Compressor Station 116”) is proposed to be located on the Dalton Lateral in Carroll County, Georgia. The total estimated cost of the project is $471.9 million.

Transco said it has executed binding precedent agreements with Atlanta Gas Light and Oglethorpe for 100% of the incremental, year-round firm transportation service to be provided under the project.

The Oglethorpe website shows the Thomas Smith plant as a gas-fired combined-cycle facility of 1,250 MW in size.

Williams (NYSE: WMB) announced on March 19 this application. Transco, the nation’s largest-volume and fastest-growing interstate natural gas pipeline system, is a wholly owned subsidiary of Williams Partners LP (NYSE: WPZ), of which Williams owns controlling and general-partner interests.

“As long-term demand for natural gas continues to grow, particularly in the power-generation sector, we’re executing a series of large-scale, integrated projects like the Dalton Expansion that move surging supplies in the northeast to high-value markets along the Eastern Seaboard and in the Southeast,” said Rory Miller, senior vice president of Williams’ Atlantic-Gulf operating area. “These projects create the durable, fee-based revenues that represent the vast majority of our business. Over the next three years, 99 percent of Williams Partners’ planned $9 billion of growth capital is going toward fully-contracted, fee-based projects.”

To fund the lateral pipeline portion of the Dalton project, Williams Partners’ Transco and AGL Resources Dogwood Enterprise Holdings Inc. have entered into an ownership arrangement whereby each party will hold a 50% undivided joint ownership interest in the lateral pipeline in Georgia. Under the proposal, Dogwood Enterprises will lease its ownership interest in the lateral to Transco. Transco’s net investment in the project is expected to be approximately $275 million.

Williams and AGL Resources initially disclosed their intent to develop the project in March 2014. Siting and environmental studies have been underway since that time, and the March 19 announcement signifies the commencement of the FERC approval process. Construction is planned to begin in the third quarter of 2016 with completion targeted for 2017, subject to all necessary or required approvals by regulatory bodies, including the FERC.

AGL Resources (NYSE: GAS) is an Atlanta-based energy services holding company with operations in natural gas distribution, retail operations, wholesale services and midstream operations.

Williams is a premier provider of large-scale infrastructure to connect North American natural gas and natural gas products to growing demand for cleaner fuel and feedstocks. Headquartered in Tulsa, Okla., Williams owns approximately 60% of Williams Partners LP, including the general-partner interest. Williams Partners is an industry-leading, large-cap master limited partnership with operations across the natural gas value chain from gathering, processing and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene and other olefins.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.