UPDATE 1-Constitution Pipeline seeks approval for new Pa. natgas line

NEW YORK, June 14 Fri Jun 14, 2013 1:39pm EDT

NEW YORK, June 14 (Reuters) - Constitution Pipeline Co on Friday said it filed an application with the Federal Energy Regulatory Commission to build a new natural gas pipeline to transport gas from the Marcellus shale formation in Pennsylvania to U.S. Northeast markets.

The proposed 122-mile (195-km) pipeline will cost an estimated $683 million to build and is designed to transport up to 650 million cubic feet per day of gas, enough to serve about 3 million homes.

U.S. natural gas production has climbed to record highs in the last two years, primarily due to growing output from shale plays like Marcellus in Appalachia and Eagle Ford in Texas.

But the lack of infrastructure, particularly in Marcellus, to process and transport gas to key northeast markets has at times slowed development.

The gas from Williams Partners' gathering system in Susquehanna County, Pennsylvania, will be shipped to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in New York, the company said.

"Constitution would become a key piece of natural gas infrastructure in the region, supporting the overall reliability and diversification of energy infrastructure in the northeastern United States and helping our nation realize the full benefit of these abundant, clean-burning natural gas supplies," the Constitution members said in a joint statement.

Constitution is owned by units of Williams, Cabot Oil & Gas Corp, Piedmont Natural Gas Co and WGL Holdings Inc.

The 30-inch (76-cm) underground pipeline would stretch from Susquehanna County in northeast Pennsylvania to Schoharie County in east-central New York.

Williams owns 41 percent of Constitution and, through its affiliates, will provide construction, operation and maintenance services for the new pipeline.

Cabot owns a 25 percent share, Piedmont owns 24 percent and WGL owns 10 percent.

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