Cabot secures Transco natural gas pipeline space, sales to WGL

Cabot Oil & Gas Corp. executed a 500-MMcfd gas sale and purchase agreement with a subsidiary of WGL Holdings and a binding precedent agreement with Transcontinental Gas Pipe Line Co. LLC (Transco) for a new pipeline with committed takeaway capacity from Cabot's acreage in Susquehanna County, Pa.

The WGL agreement will take effect when Transco’s Atlantic Sunrise expansion enters service, currently scheduled for second-half 2017. The agreement with Transco will allow it to build and operate roughly 177 miles of new pipeline, the Central Penn Line, from the Zick area of Susquehanna County to an interconnect with Transco's mainline in Lancaster County, Pa., as part of Atlantic Sunrise. Cabot will own 850 MMcfd of firm capacity on Atlantic Sunrise and will also be an equity owner.

The combined agreements pave the way for Cabot’s shipment of 350 MMcfd to Dominion Cove Point LNG to fulfill a 20-year supply agreement with Pacific Summit Energy, a wholly owned subsidiary of Sumitomo Corp.

The US Department of Energy in September approved up to 770 MMcfd of exports from Cove Point for 20 years to countries that do not have free-trade agreements (FTA) with the US. Cove Point received clearance to export to FTA countries in 2011.