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Williams Partners plans natural-gas pipeline expansion in Lebanon, Lancaster counties

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A subsidiary of an Oklahoma-based gas pipeline company has announced plans to build an extension of an existing line through the midstate that would allow Marcellus Shale gas to reach markets in the South.

Williams Partners LP is proposing the Atlantic Sunrise Expansion of the Transcontinental — or Transco — pipeline that would send new infrastructure through Lancaster and Lebanon counties. Representatives from the company met with the Lebanon County commissioners to discuss the line during a work session Wednesday.

The Transco line now runs from the New York City area south to the Gulf of Mexico, cutting through parts of Lancaster and York counties.

“What we’re looking at doing is extending that reach by adding infrastructure that would allow customers to have greater access to that supply (in the Marcellus Shale region),” said Chris Stockton, a Williams spokesman.

The Atlantic Sunrise project is part of a phenomenon that has been occurring over the past half-dozen years, Stockton said. Originally, the Transco line was constructed to transport gas from the South to the North. With Marcellus gas filling the market, Atlantic Sunrise is the latest in proposed or existing projects that will move gas north to south.

The project is in the very preliminary stages, with the company planning to prefile with the Federal Energy Regulatory Commission soon, Stockton said. Already the company has started contacting municipal officials in affected areas and will begin on-the-ground surveying in the coming months.

Work also will involve modifications to existing compressor stations and other infrastructure to allow gas to flow both south to north and north to south.

Just today, Williams Partners announced it had received binding commitments from nine shippers for 100 percent of the 1.7 million dekatherms of firm transportation capacity under the Atlantic Sunrise project, according to a news release. The project includes 15-year shipper commitments from producers, local distribution companies and power generators.

Meanwhile, Tulsa-based parent company Williams, which owns or has an interest in more than 10,000 miles of pipeline servicing about 14 percent of all gas consumed in the U.S., recently announced a nearly 50 percent decrease in net earnings in its end-of-year financial report for 2013.

Williams reported unaudited net income of $430 million, or $0.62 per diluted share, compared with net income of $859 million, or $1.37 per diluted share for 2012, according to a news release.

In the fourth quarter, Williams reported a net loss of $14 million, or $.02 per diluted share, compared with net income of $149 million, or $0.23 per share, for fourth-quarter 2012.

The company blamed the decline in net income for 2013 in part on the six months of lost production at the Williams Partners’ Geismar, La., olefins plant. An explosion at the ethylene production facility in June killed two workers and injured 114 others, according to news reports. The company hopes to have the plant online by April.

Also affecting the bottom line were lower natural-gas liquids margins at Williams Partners, as well as the absence of $207 million of income in first-quarter 2012 associated with the sale of some of the company’s former Venezuela operations, of which $144 million was recorded within discontinued operations, according to the news release. In addition, $99 million of tax expense on undistributed foreign earnings related to the planned dropdown of its Canadian operations to Williams Partners, which is expected to close by the end of this month.

Shares of Williams are traded on the New York Stock Exchange under the ticker symbol WPZ.

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