Although Williams has suspended capital investments for the proposed Bluegrass Pipeline in the absence of sufficient firm customer commitments, the company isn’t letting the grass grow under its feet. Williams Partners LP and its wholly owned subsidiary, Transcontinental Gas Pipe Line Co. LLC (Transco), will undertake the Gulf Trace project, a $300 million, 1.2 million-dekatherms-per-day expansion of the Transco pipeline system. The project is targeted to enter service in early 2017.

Gulf Trace will make Transco’s production area mainline and southwest Louisiana lateral systems bi-directional from Station 65 in St. Helena Parish, La., to Cameron Parish, La. It also includes the construction of a new eight-mile, 36-inch lateral pipeline and two new compressor stations to provide firm transportation service to the Sabine Pass LNG facility.

The Sabine Pass liquefaction project being developed by Cheniere Energy Partners LP in Cameron Parish will connect burgeoning U.S. natural gas supplies with global LNG markets. In 2011, the Sabine Pass LNG export facility became the first to receive a U.S. export license for LNG to countries without free trade agreements. It is now on track to be the first large-scale LNG export facility in the U.S. and is scheduled to be completed in phases beginning as early as fourth-quarter 2015. It is already supported by long-term contracts with several LNG offtake shippers.

Rory Miller, senior vice president of Williams Partners’ Atlantic-Gulf operating area, said, “Gulf Trace is a pivotal project at an extremely important time for Transco and the U.S. natural gas industry as a whole.”

While Transco is pursuing several large-volume projects to meet the growing U.S. demand for natural gas, production growth in U.S. shales is driving down domestic prices. Meanwhile, the potential for exports to growing areas such as the Asia-Pacific market—where demand for imports from outside the region increased by 12% annually from 2000 to 2010—justify the initial expenses of LNG export projects.

“Gulf Trace is designed to ensure we continue to serve our existing customers who rely on natural gas from the Gulf Coast, while adding a very large, long-term market commitment in an area of Transco’s system that is seeing decreased utilization due to changing gas supply patterns in the United States,” Miller added.

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