Piedmont Natural Gas has invested $180 million in a pipeline project that will ship natural gas from the massive Marcellus Shale deposits in northern Pennsylvania to markets in New York and New England.
Piedmont will own 24 percent of the project through its Piedmont Constitution Pipeline Co. subsidiary, joining Williams Partners L.P., and Cabot Oil & Gas Corp. The project is scheduled to go into service in March 2015.
Piedmont CEO Thomas Skains said the investment in the project, called Constitution Pipeline Co. LLC, aligns very well with our strategic focus on expanding our investments in complementary energy-related businesses.
Piedmont also has invested in joint ventures in gas storage, intrastate pipelines and natural gas retail marketing services.
Williams Partners, which will own 51 percent of the venture, has interests in three major interstate natural gas pipelines that, together, deliver 14 percent of the natural gas consumed in the United States. Williams is a customer of Piedmonts existing Transco pipeline system and a partner in pipeline and storage projects in North Carolina.
Houston-based Cabot Oil & Gas is an independent natural gas producer and will own 25 percent.
A Williams affiliate will build and operate the new 30-inch, 121-mile transmission pipeline. Its being designed with capacity to move 650,000 dekatherms of natural gas a day enough to serve about 3 million homes from production areas in Susquehanna County in northern Pennsylvania.
Recoverable natural gas deposits in the Marcellus have been estimated at 363 trillion cubic feet, enough to supply all U.S. consumption for at least 14 years. The drilling technique used to reach the gas called hydraulic fracturing or fracking is controversial, with some critics claiming it contaminates groundwater.
The new pipeline will connect with the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in New York state. It already has long-term contracts with established gas producers in Pennsylvania.
Williams and Cabot announced the Constitution Pipeline project in February. Construction is expected to begin in April 2014.
Charlotte-based Piedmont Natural Gas serves more than 1 million customers in the Carolinas and Tennessee.