With the Atlantic Sunrise expansion on the Transcontinental Gas Pipe Line Co. LLC system up and running, Williams Cos. Inc. sanctioned a new Pennsylvania natural gas pipeline expansion and is ready to make an announcement on another, still unnamed project.
Williams executives said on a Nov. 1 earnings call that the new projects are two of more than 20 expansion opportunities on the Transco natural gas pipeline system, which spans much of the eastern U.S.
"These projects just keep adding to our string of hits," Williams President, CEO and Director Alan Armstrong said.
The company decided to move forward with the new Leidy South expansion, which recently secured long-term, take-or-pay contracts for all of its 580-MMcf/d transportation capacity. The project, which Williams executives referred to as "Project 2" when speaking with analysts, has a target in-service date in the fourth quarter of 2021 at a capital cost of about $450 million to $550 million.
Connecting receipt points on Transco's Leidy system to Transco Zone 6 markets in the U.S. Northeast, the project would provide an outlet for producers and support increased gathering volumes on Williams' northeastern Pennsylvania gathering system, Armstrong said.
Williams plans to unveil the unnamed Transco project, known as "Project 1," in the fourth quarter. Given the few details available, the expansion sounded big. It would provide more than 1 Bcf/d of firm transportation capacity in Transco zones 3, 4, 5 and 6, which run from New York City at the northern end of the system, down the East Coast, and across the Southeast to western Louisiana. A slide that was part of Armstrong's presentation said the project would provide "attractive returns consistent with recent Transco expansions."
Transco put the 1.7-Bcf/d Atlantic Sunrise expansion into service Oct. 6, and gas flows immediately jumped to the limits of the new transportation capacity, which brought total Transco system capacity to 15.8 Bcf/d. Gas producers in Pennsylvania were ready to use the added takeaway, and Armstrong said the expansion provides $35 million of revenue each month.
Another driver of 2019 revenues will be the 475-MMcf/d Gulf Connector project. Armstrong said construction is ahead of schedule, and the facility has a target in-service date in the first quarter of 2019. The expansion will serve two coming LNG export facilities on the Gulf Coast: Cheniere Energy Inc.'s Corpus Christi terminal and the Freeport LNG Development LP terminal.
In its third-quarter earnings results, Williams posted EBITDA of $1.20 billion, an increase from $1.11 billion in the same quarter the year before. The S&P Global Market Intelligence consensus adjusted EBITDA estimate was $1.14 billion.
