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Transco awaits U.S. OK for weekend start of natgas pipe expansion
July 11, 2013 / 9:42 PM / 4 years ago

Transco awaits U.S. OK for weekend start of natgas pipe expansion

NEW YORK, July 11 (Reuters) - The owner of the Transcontinental Gas Pipeline Co LLC was waiting on Thursday for federal energy regulators to approve the startup this weekend of a segment of a natural gas pipeline expansion project.

Williams Cos Inc said starting the new segment will enable it to reroute supply to customers while performing some work on another segment. The company requested approval of the new segment in June so it could take the other segment offline to perform project construction.

As of late Thursday afternoon, no authorization letter granting the request appeared on the U.S. Federal Energy Regulatory Commission (FERC) website under the Williams’ project docket number.

The company said it would not take the existing line off “right away” unless FERC approves the request but it provided no further timeline.

“The deadline we gave FERC and the days when the line would be taken out of service are not the same,” Chris Stockton, a spokesman for Williams, told Reuters late Thursday afternoon. He said the company would not take its line out of service this weekend unless it gets approval to operate the new segment.

Stockton said it would be hard to determine how much gas delivery capability may be at stake, “since it will be based on system utilization at the time of the work.”

The work is related to the Northeast Supply Link project, an extension of the Transco line designed to transport around 250 million cubic feet per day of gas to markets in Pennsylvania, New York and New Jersey.

The full 10,200-mile Transco pipeline has a capacity to deliver some 9.8 billion cubic feet per day of natural gas from the Gulf Coast to the Northeast.

The request to put the line into service is construction-related and “no project-related revenue will be collected” until the target date of Nov. 1, 2013, Williams said in the initial request to regulators.

Natural gas has traditionally been costly in the densely populated U.S. Northeast. During cold spells, when home heating demand peaks, the price can spike close to $40 per million British thermal units (mmBtu), or eight to 10 times higher than prices during normal demand.

Prices have eased in recent years due to bountiful natural gas supplies from the Marcellus Shale, a hydrocarbon-rich basin under Pennsylvania. Associated pipeline projects have brought the fuel to market.

In 2012, prices at Transco Zone 6 , the delivery point in New York City, averaged $3.20 per million British thermal units (mmBtu), some 37 percent lower than the average 2011 price.

This year’s natural gas price average at the New York pipeline hub have is some 86 percent higher, through early July. Spot gas prices rose to a five-year high in January at $38 per mmBtu as cold weather prompted the need for more gas to heat homes.

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