Atlantic Sunrise construction stopped after court order
Cabot, biggest natural gas shipper on the line, plunges
Williams Partners LP blasted environmental groups that won a surprise stop to construction of a Pennsylvania natural gas pipeline, saying they’re "opponents of American energy" and putting as many as 8,000 jobs in jeopardy.
Williams’ $3 billion Atlantic Sunrise project is fully compliant with federal and state regulations, the company said in a statement. It was reacting to a Monday order by the U.S. Court of Appeals for the D.C. Circuit that put a temporary stay on earlier governmental approval for the project. Opponents want to stop construction, which began in September, as they move forward with a legal challenge to a February approval from the Federal Energy Regulatory Commission.
“Atlantic Sunrise has undergone a nearly four-year, extensive review process,” Micheal Dunn, Williams Partners’ chief operating officer, said in the statement. “These current actions by opponents of American energy are, this morning, idling thousands of workers in Pennsylvania and could delay the benefits of low-cost energy delivery to millions of American families.”
It’s not the first time Williams has suffered project delays in the Northeast. Earlier this year, the company pressed President Donald Trump’s administration for a U.S. Army Corps of Engineers permit after New York refused to certify the $925 million Constitution gas pipeline. That project remains embroiled in legal battles.
Atlantic Sunrise is designed to ship up to 1.7 billion cubic feet of gas a day from the Marcellus shale region, the country’s largest producer of the power-plant fuel. The project would plug into Williams’ Transco pipeline, a gas superhighway that runs from the Gulf of Mexico up the East Coast to New York City. Environmental groups including Allegheny Defense Project are appealing the project’s approval.
“Williams has all necessary permits in hand, the process has been extensive, and FERC has been much more responsive under the Trump administration,” Matt Schmid, an analyst at Stephens Inc., said by email. “But it’s hard to know how extensive of a review would be required at this point.”
Cabot Oil & Gas Corp., which would be the largest gas shipper on Atlantic Sunrise, plunged as much as 5.6 percent. The shares closed down 3.3 percent at $27.84 in New York. Cabot also began trading ex-dividend Tuesday.
With Atlantic Sunrise in service, Cabot would be able to increase its gas production by 1 billion cubic feet a day, or by nearly 50 percent annually, Robert Christensen, an analyst at Drexel Hamilton, wrote in a note on Tuesday.
“This is a major upset,” Christensen wrote, while downgrading Cabot to hold from buy. “Now there is no telling when this project may proceed.”
Cabot had planned for a mid-2018 start of the project and to sell about 1 billion cubic feet of gas a day along the pipeline to new markets, according to company filings dated Oct. 27. The company didn’t immediately respond to phone and email requests seeking comment.
Williams expects the court to "expeditiously complete its review" on the matter, the company said.