A leading master limited partnership, Williams Partners L.P. (WPZ) received Federal Energy Regulatory Commission (FERC) approval to expand its natural gas pipeline system Transco, to provide service to a new, gas-fired, power-generation plant in Virginia.
The 1,358-megawatt plant would be constructed by a unit of Dominion Resources, Inc. (D) in Brunswick County, Va.
The approximately $300 million Transco expansion is designed to provide 270,000 dekatherms per day (dth/d) of incremental transportation capacity in Virginia and North Carolina by Sep 2015. Of the total expanded capacity, more than 90% will serve Dominion Virginia Power’s new power plant; the remainder will serve Piedmont Natural Gas Company Inc.’s (PNY) local-distribution business in North Carolina.
The Virginia Southside Expansion is part of $2.2 billion of Transco growth projects that Williams Partners plans to bring into service between 2013 and 2017. Together, these projects are designed to increase the Transco system capacity by more than 35%. The expansions, which consist of 11 projects in nine eastern states, are designed to serve customers’ demand for power generation, industries and local distribution.
A 10,200-mile Transco pipeline supplies natural gas transportation and storage services markets throughout the Northeastern and Southeastern United States. The key markets of the pipeline include New York City, Philadelphia, Washington D.C. and Atlanta, while the major customers are mainly power generators, local distribution companies and producers.
Over the last 10 years, the company has invested nearly $2 billion and commissioned 21 Transco growth projects. Currently, the system capacity is around 10.2 million dekatherms per day, which is adequate to provide natural gas to about 42 million homes.
Williams Partners carries a Zacks Rank #3 (Hold). Investors interested in the oil and gas industry may consider a better-ranked stock like AmeriGas Partners LP (APU). This Zacks Rank #1 (Strong Buy) stock is expected to outperform in the near term.
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