WGL Announces $410 Million Investment in the Atlantic Sunrise Project
WASHINGTON--(BUSINESS WIRE)--WGL Holdings, Inc. (NYSE: WGL), through its subsidiary WGL Midstream, Inc. (WGL Midstream), is the lead investor in an agreement with three other parties to create a company that will jointly develop and own, together with Transcontinental Gas Pipe Line Company, LLC (Transco), the Central Penn Line, a 177-mile pipeline originating in Susquehanna County, Pennsylvania and extending to Lancaster County, Pennsylvania. The Central Penn Line is the greenfield pipeline segment of Transco’s recently announced Atlantic Sunrise project which currently has a projected in-service date in the second half of 2017.
“We have a platform that not only reinforces our regional natural gas delivery system, but also provides asset ownership.”
As part of the agreement, WGL Midstream will invest approximately $410 million, resulting in a majority ownership interest in the company that will co-own the Central Penn Line with Transco. This transaction is WGL Midstream’s second significant investment in natural gas infrastructure in less than nine months, and it will provide WGL Midstream with sustainable, regulated earnings. Also, this transaction reaffirms WGL’s strategy to grow a portfolio of infrastructure investments in clean and efficient energy assets across the United States.
The Central Penn Line, as part of Atlantic Sunrise, is a natural gas pipeline project designed to provide new firm gas transportation capacity from various supply points in northeast Pennsylvania to a delivery point into Transco’s mainline in southeast Pennsylvania. The pipeline will have the capacity to transport and deliver up to approximately 1.7 million dekatherms per day of natural gas.
The Central Penn Line will be part of a transformational project in light of the increased production of natural gas in the Marcellus region, particularly in northern Pennsylvania. The project will be instrumental in addressing the current challenge of transporting natural gas from an area with abundant supply to existing established markets.
“As the need for natural gas continues to increase, WGL is well positioned to meet future demand levels and will be able to continue to provide more businesses and residential customers with the benefits of safe and reliable natural gas,” said WGL Chairman and CEO, Terry D. McCallister. “We have a platform that not only reinforces our regional natural gas delivery system, but also provides asset ownership.”
In connection with the $410 million investment, WGL Midstream entered into an agreement with Cabot Oil and Gas Corporation to purchase 500,000 dekatherms per day of natural gas over a 15 year term. The structure of this agreement provides WGL Midstream with low-risk access to Marcellus supply.
WGL will provide more information during its 2014 Analyst Meeting webcast which will be held in New York on Thursday, March 13, 2014, from 9 a.m. to noon Eastern time. At the event, executives of WGL Holdings, Inc., will review the company's financial objectives and discuss key strategic and operating initiatives that support achieving those objectives.
This news release and other statements by us include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the outlook for earnings, revenues and other future financial business performance or strategies and expectations. Forward-looking statements are typically identified by words such as, but not limited to, “estimates,” “expects,” “anticipates,” “intends,” “believes,” “plans,” and similar expressions, or future or conditional verbs such as “will,” “should,” “would,” and “could.” Although we believe such forward-looking statements are based on reasonable assumptions, we cannot give assurance that every objective will be achieved. Forward-looking statements speak only as of today, and we assume no duty to update them. Factors that could cause actual results to differ materially from those expressed or implied include, but are not limited to, general economic conditions and the factors discussed under the “Risk Factors” heading in our most recent annual report on Form 10-K and other documents we have filed with, or furnished to, the U.S. Securities and Exchange Commission.
Headquartered in Washington, D.C., WGL Holdings, Inc. has four operating segments: (i) the regulated utility segment which primarily consists of Washington Gas, a natural gas utility that serves over one million customers throughout metropolitan Washington, D.C. and the surrounding region; (ii) the retail energy-marketing segment which consists of Washington Gas Energy Services, Inc., a third-party marketer that competitively sells natural gas and electricity; (iii) the commercial energy systems segment which consists of Washington Gas Energy Systems, Inc., a provider of design-build energy efficiency solutions to government and commercial clients, commercial solar projects, and the operations of WGSW, a holding company formed to invest in alternative energy assets and (iv) the wholesale energy solutions segment which consists of WGL Midstream, an asset optimization business that acquires, manages and optimizes natural gas storage and transportation assets. Additional information about WGL Holdings, Inc. is available on our website, www.wglholdings.com.