Williams Shale Gas Line Delayed on Environmental Permits

  • Company sees Constitution Pipeline operating in 2017
  • Conduit would add shipping capacity from Marcellus Shale

The opening of Williams Partners LP’s proposed $925-million Constitution natural gas pipeline will be delayed to the second half of 2017 as the developer awaits a permit to clear trees in New York and other environmental approvals.

The in-service date has been pushed back from the fourth quarter of 2016, Williams said in a statement Thursday. Once the permits are granted, the Oklahoma City-based company anticipates the start of construction in the summer. Tulsa, Oklahoma-based Williams Cos., which controls and holds a majority stake in Williams Partners, dropped as much as 17 percent in intraday trading.

The developer is seeking from New York state a water permit and approval to clear trees. The project also requires approval from the U.S. Army Corps of Engineers and a final go-ahead from the U.S. Federal Energy Regulatory Commission, the agency overseeing the review. The commission gave initial approval to build and operate the project in December 2014. Tree-felling is almost complete in Pennsylvania.

Williams Cos. fell 10 percent to $15.52 at at 1:22 p.m. in New York after touching 14.84. Williams Partners declined 2 percent to $18.71.

The 124-mile (200-kilometer) line will bring gas from the Marcellus shale region in Northeast Pennsylvania to New England and New York. Williams, the largest stakeholder at 41 percent, is developing the pipeline with Cabot Oil & Gas Corp., Piedmont Natural Gas Company Inc., and WGL Holdings Inc.

Gas producers in the Marcellus, including Cabot, are counting on the Constitution project to relieve pipeline bottlenecks that have led to a supply glut, depressing prices and leading drillers to shut-in wells and curb output. Cabot rose 1.7 percent to $21.60 in New York. Piedmont and WGL Holdings were little changed.

The 650,000 dekatherm per day pipeline project has triggered opposition from landowners, public officials and environmental groups over potential impacts on wildlife, property values, public safety and air quality. Federal regulators staff concluded in an October, 2014 environmental evaluation that adverse impacts could be reduced to less-than-significant levels.

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