The Williams Companies, Inc. WMB recently urged the Federal Energy Regulatory Commission (FERC) to extend the timeline of its long-delayed Constitution pipeline, per Reuters. The project was approved by the regulatory board in December 2014 but the construction process has been facing resistance from the New York Department of Environmental Conservation (NYSDEC) since April 2016.
The pipeline runs from Pennsylvania to New York and can addresses natural gas demand in more than 3 billion homes. The pipeline’s construction faced a blow from the New York environmental regulators who turned down the company’s request for a water quality permit, due to which Williams wants to push the timeline to December 2020. The company has already challenged the environmental regulators’ denial, which awaits another ruling from the FERC.
Originally, the pipeline was scheduled to come online in December 2016. Following the water permit denial, the regulatory board agreed to push the date to December 2018. As the permit is yet to come, the company does not expect the project to be finished within the given time. Williams has already withdrawn and resubmitted the pipeline’s application twice so far. After receiving the required permits, the company expects to take around 10 months to a year for the completion of the project.
The 125-mile pipeline (201 kilometers) is designed to ship 0.65 billion cubic feet per day (Bcf/d) of natural gas extracted from the U.S. shales. Apart from providing clean energy, the pipeline is also expected to generate many jobs for the localities. With the project being delayed, the cost is increasing, which is a high concern for the company. In 2013, the cost of the project was estimated at around $683 million, which has now gone up to about $875 million.
Apart from Williams, energy companies like Cabot Oil & Gas Corporation COG, Duke Energy Corporation DUK and WGL Holdings, Inc. WGL also own stakes in the pipeline.
Price Performance and Zacks Rank
Tulsa, OK-based Williams has lost 6.8% in the past year compared with 10.9% fall of the industry it belongs to. The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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