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Cabot eyes state approval of Atlantic Sunrise

28 Apr 2017 21:44 (+01:00 GMT)
Cabot eyes state approval of Atlantic Sunrise

Houston, 28 April (Argus) — Cabot Oil & Gas executives expect the 1.7 Bcf/d (48mn m³/d) Atlantic Sunrise natural gas pipeline project to receive full approval and permits by early July.

The independent producer has purchased 850mn cf/d of capacity on the project and agreed to sell an additional 150mn cf/d of gas for a term of three years related to the project. The project would modify the Transcontinental Gas mainline to allow that system to deliver more Marcellus shale gas produced in Pennsylvania to markets. The US Federal Energy Regulatory Commission (FERC) approved Atlantic Sunrise in February prior to chairman Norman Bay's resignation, which left the regulatory body without a quorum.

The project has completed all of its cultural and environmental surveys required for remaining permits in Pennsylvania, Cabot chief executive Dan Dinges said during an earnings call today. The project team expects to file the final permit application with the Pennsylvania Department of Environmental Protection in early May, with full approval anticipated in early July.

Dinges said the project team is "confident" that the line will be in service by mid-2018.

"If you've been following other projects in southwest Pennsylvania, in Ohio, West Virginia, ... the notices to proceed are coming out on a regular basis" from FERC, senior vice president of marketing Jeffrey Hutton said. The project has received some partial notices to proceed for the mainline construction ranging from compressor station work to looping, "and you see those pop up about every week," he added.

The company had a realized price of $2.64/1,000 cf, up by 77pc from the year earlier, driven primarily by an increase in Marcellus volumes that benefitted from an improved market, Dinges said. Cabot produced 1.82 Bcf/d during the first quarter, up by 7pc from the year earlier.

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