October 4, 2018 / 2:15 PM / 11 days ago

UPDATE 2-U.S. approves Williams' Atlantic Sunrise natgas pipe for service

(Adds production in Marcellus and Utica)

Oct 4 (Reuters) - U.S. federal energy regulators on Thursday approved a request by Williams Cos Inc’s Transcontinental Gas Pipe Line Co (Transco) unit to put the Atlantic Sunrise natural gas pipeline from Pennsylvania to South Carolina into service.

Atlantic Sunrise is one of several pipelines designed to connect growing output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in other parts of the United States and Canada.

The U.S. Federal Energy Regulatory Commission (FERC) said in a filing approving the startup of the nearly $3 billion project that Transco has “adequately stabilized the areas disturbed by construction and that restoration is proceeding satisfactorily.”

The 1.7 billion-cubic-feet-per-day (bcfd) Atlantic Sunrise project includes about 198 miles (319 km) of new pipe located mostly in Pennsylvania, two new compressor stations and compressor station modifications in five states.

One billion cubic feet is enough gas to power about 5 million U.S. homes for a day.

Cabot Oil & Gas Corp has secured about 1 bcfd of transport capacity on Atlantic Sunrise.

New pipelines built to remove gas from the Marcellus and Utica basins have enabled shale drillers to boost output in the Appalachia region to a forecast record high of around 29.4 bcfd in October 2018 from 24.2 bcfd during the same month a year earlier.

That represents about 36 percent of the nation’s total dry gas output of 81.1 bcfd expected on average in 2018. A decade ago, the Appalachia region produced just 1.6 bcfd, which was only 3 percent of the nation’s total production in 2008.

Williams said it started laying new pipe in Pennsylvania in September 2017. FERC authorized construction of the project in February 2017.

Reporting by Scott DiSavino in New York; Editing by Jeffrey Benkoe and Susan Thomas

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