Atlantic Sunrise pipeline to take Marcellus gas southeast

A proposed 178-mile pipeline in northeastern Pennsylvania that aims to connect Marcellus Shale production to the Mid-Atlantic and southeast is advancing.

The Federal Energy Regulatory Commission said it is preparing an environmental impact statement for the proposed Atlantic Sunrise expansion project.

The pipeline, proposed by Tulsa-based midstream company Williams, will connect to the company’s Transcontinental Gas Pipeline (Transco), a 10,200-mile, 10.2 billion cubic feet per day (Bcf/d) natural gas system that spans South Texas to New York City.

The 1.7 Bcf/d Atlantic Sunrise project will include construction in Pennsylvania, Virginia, Maryland, North Carolina and South Carolina.

FERC will use the environmental impact statement in its decision-making process to determine whether Atlantic Sunrise is a public necessity, the agency said in documents filed July 18.

“We’re in the pre-filing phase of the project, so it’s still relatively early,” said Chris Stockton, a spokesman for Williams, adding that the company hopes to file an application with FERC next year.

The shale boom has upended traditional flows of natural gas supply.

Investment firm Moody’s noted that the Marcellus in particular has been “very disruptive to the established U.S. natural gas infrastructure network.”

“Over the past decades, a large part of the natural gas grid in the U.S. was designed to transport the fuel from the supply regions in the south to the demand regions in the Northeast and Midwest. The emergence of the Marcellus requires a redesign to the way we view natural gas flows in the US,” Moody’s said in a March report.

That phenomenon can be seen in the Transco pipeline.

The system “for decades has moved gas from the south to the north,” Mr. Stockton said. “The country has reached a tipping point as more production is coming from Pennsylvania than the Gulf [of Mexico].

“This project not only connects Transco with more emerging production, but also allows markets in the Mid-Atlantic and southeast to access Marcellus supply,” Mr. Stockton said.

Meanwhile, oversupply in the Marcellus region has depressed natural gas prices.

For example, on Jan. 22 — peak winter demand during an exceptionally harsh winter — gas prices in Northeastern Pennsylvania clocked in at $4.77 per million cubic feet compared to $123.48/Mcf in eastern Maryland.

“This will provide some relief for winter demand in Maryland and Virginia,” said Diana Oswald, energy analyst for Bentek Energy in Denver. “The project also should help decrease some of the well backlogs in the Marcellus.”

Atlantic Sunrise is one of several infrastructure projects slated for the Marcellus and Utica.

Bentek forecasts that by 2019, the Marcellus and Utica plays will add 13 Bcf/d on top of the current 16 Bcf/d of natural gas. Announced pipeline projects are expected to provide about 22 Bcf/d of capacity, Ms. Oswald said.

Stephanie Ritenbaugh: or 412-263-4910, Twitter: @StephanieRit

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