Williams Gets U.S. Approval for $3 Billion Shale Gas Lineby and
Authorization marks end of nearly two-year application process
Approval was urged before agency lost quorum to make decisions
Williams Cos. won U.S. approval to build its $3 billion Atlantic Sunrise natural gas pipeline expansion in the Northeast, ending a review that ran almost two years and forced delays in the project.
The 200-mile (322-kilometer) pipeline will expand shipments from shale formations by enough to serve 7 million homes, according to Williams. The Federal Energy Regulatory Commission approved it on Friday just hours before the scheduled resignation of commissioner Norman Bay, whose departure will leave the agency without the quorum needed for major decisions.
The decision spares Williams further delays after already waiting for more than 670 days for clearance. Last year, the stocks of both Williams and a would-be shipper on the project, Cabot Oil & Gas Corp., plunged on speculation that the expansion would face more regulatory setbacks. The time it takes to approve such pipelines has jumped to 429 days from 359 days just in the past three years as environmental opposition grows, according to Bloomberg Intelligence.
Williams said in a statement Friday that it was pleased the agency had approved “this much-needed energy infrastructure project.” The company said it plans to start construction on the main portion of the project in mid-2017, establishing a path for more gas to flow to markets along the Eastern Seaboard in time for the 2017-2018 winter heating season.
Construction on another part of the project known as the Central Penn Line is scheduled to begin in the third quarter, allowing Williams to bring the entire capacity of the expansion into service in mid-2018.
Williams is among the U.S. pipeline developers proposing massive expansions of America’s gas pipeline system to accommodate supplies flowing out of the Marcellus and Utica shale basins in the eastern U.S. Production there has outpaced the capacity to deliver the fuel to markets.
If the review of Atlantic Sunrise had dragged on after Bay’s departure, Williams would have faced months of delays, according to David Wochner, a partner at the Washington-based law firm K&L Gates. It could take as long as 60 days for President Donald Trump’s administration to fill the vacancy on the energy commission and restore a quorum, he said.
Cabot and Seneca Resources Corp. are among the largest gas producers with contracts for space on Atlantic Sunrise.
Sierra Club criticized the energy commission for its approval late Friday, saying its decision to “rush this dirty and dangerous project through is nothing short of reckless” and warning that it would keep the U.S. dependent on “a dirty fuel.”
A smaller, controversial gas project proposed by National Fuel Gas Co. in the Northeast also gained the agency’s approval. The company said in January that it had delayed the startup of the $455 million Northern Access expansion to 2018 while waiting on the commission to decide.