Transco's Leidy expansion clears FERC as NJNG anchors 175,000 Dth/d

New Jersey Natural Gas has committed to the full 175,000 dekatherms per day offered in Transco's Leidy Access Expansion open season, and Transco has asked FERC for approval to add 183,100 Dth/d of eastbound Marcellus capacity.

The pipeline, a Williams subsidiary, ran a binding open season through June and closed it on June 26. NJNG signed up as anchor shipper for everything on offer. A Williams affiliate took a little more than that for itself, according to the company's filing.

That "little more" matters more than it sounds. The application Transco filed with FERC on September 4 seeks 183,100 Dth/d of expansion capacity, roughly 8,100 Dth/d above the 175,000 Dth/d base volume that was marketed in the open season.

What did the open season produce?

• Binding open season held in June, closed June 26
• NJNG signed as anchor shipper for the entire 175,000 Dth/d on offer
• A Williams affiliate took a slightly larger volume
• Application filed with FERC on September 4, seeking 183,100 Dth/d of capacity
• FERC published its schedule for the environmental review last Friday

Takeaway: the project cleared its commercial phase with one shipper taking essentially the whole marketed block.

Where does the gas go?

The Leidy Access Expansion sits on the eastbound side of the Transco system, the corridor the pipeline itself described in the earlier open-season notice, "Williams Open Season to Expand Transco Gas Eastbound to PA, NJ, MD." The supply side is the Marcellus basin in Pennsylvania. The direction is east.

An anchor shipper of this size changes the risk profile of the project. Capacity is no longer being built against a list of hopeful offtakers; it is being built against a single named commitment covering the full marketed base volume, about 95.6% of the 183,100 Dth/d project capacity.

Takeaway: one shipper now underwrites the bulk of the capacity, which is the commercial difference between this project and a speculative one.

How big is 183,100 Dth/d?

• 183,100 Dth/d equals about 183 million cubic feet per day, or roughly 1.83 million Mcf/d
• Annualised over 365 days, about 66.8 billion cubic feet per year
• NJNG's 175,000 Dth/d alone equals roughly 63.9 billion cubic feet per year
• Headroom above the marketed base volume: about 8,100 Dth/d, some 4.6% of project capacity

The conversions are approximations. Dekatherms measure heat content, cubic feet measure volume, and the two track each other within a few percentage points depending on the gas.

Takeaway: in round numbers, this is a 67-billion-cubic-foot-a-year project carrying a 64-billion-cubic-foot anchor.

What does the FERC schedule change?

Transco filed its application with FERC on September 4. Last Friday the commission published the schedule for the environmental review, the procedural clock that governs the remaining federal work on the docket.

In pipeline practice, the environmental review is the last major gate before construction and in-service. Publishing a schedule fixes the milestones. It does not approve anything yet.

If all goes to plan, an extra 183,100 Dth/d of Marcellus gas starts flowing east on December 1, 2027. From filing to start date runs a little over two years and three months.

Takeaway: the project now carries a date on the calendar and a published review schedule behind it.

What should readers watch?

• FERC's environmental review milestones, and any intervention that could shift the schedule
• Whether the December 1, 2027 in-service date survives the review
• The roughly 8,100 Dth/d of headroom above the anchor commitment, which is where the pricing signal lives
• Whether a single-shipper open season outcome repeats in the next Transco expansion cycle

The margin is the telling number here. NJNG took the whole marketed block at posted terms, and the Williams affiliate took a little more, which is the first hard evidence of what the pipeline will charge for the last few percent of capacity.

Watch the headroom rather than the headline. The December 2027 date and the anchor contract are settled; the price of the final 8,100 dekatherms says more about Transco's appetite for the next expansion than the anchor deal does.