Duke Energy Takes Stake in Atlantic Pipeline Venture

Duke Energy Corp. is returning to the pipeline business as the co-owner of a new $5 billion natural-gas line that will run from West Virginia to the southeast corner of North Carolina.

The electricity giant spun off its natural-gas division as Spectra Energy Corp. in 2007. But Duke now needs a steady supply of natural gas, especially for customers in eastern North Carolina it gained by its 2012 merger with Progress Energy Inc., said Lynn Good, chief executive of Duke, which is based in Charlotte, N.C.

The 550-mile pipeline will help Duke move away from its dependence on coal, which represents about 40% of its energy mix today, she said. The company is retiring some of its coal plants and is on track for its mix to be roughly split among natural gas, coal and nuclear by next year, she added.

Duke said Tuesday the pipeline will be built by Dominion Resources Inc., which is based in Richmond, Va., and is among the nation's largest transporters of energy. Construction could begin as soon as 2016 with the pipeline coming online by winter 2018, said Thomas Farrell, Dominion's chief executive.

Dominion will own 45% of the pipeline and Duke will own 40%. The other partners are Piedmont Natural Gas Co., also of Charlotte, with 10%, and AGL Resources Inc., an Atlanta-based energy holding company, which will own 5%. Duke and Piedmont said in April that they were exploring a pipeline project.

The pipeline will be 20 inches in diameter in a lateral extension in Hampton Roads, Va., and range from 36 to 42 inches in diameter along the main pipeline from the Marcellus and Utica shale basins in West Virginia, Ohio and Pennsylvania south along the East Coast. It will roughly follow alongside Interstate 95 in eastern North Carolina, traversing some of the state's poorest counties and bringing construction jobs and other investment, Ms. Good said.

Pipeline construction commonly meets with opposition from landowners and others. Dominion is holding public meetings this month on site selection and said it has permission to conduct surveys from two-thirds of the homeowners who might be affected.

Write to Valerie Bauerlein at [e-mail]

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