The project will provide 636,000 dekatherms per day of incremental firm transportation capacity from TGP’s 300 Line in Pennsylvania to an interconnect in New Jersey to serve growing markets in the Northeast.

The Northeast Upgrade project is a natural extension of TGP’s presence in the Marcellus Shale play. The project will cost approximately $400m with a majority of the capital spending taking place during 2013.

Doug Foshee, chairman, president, and CEO of El Paso, said: “We are very pleased to add another major pipeline project that provides significant new firm transportation capacity for two prominent Marcellus Shale producers. With the previously announced 300 Line Project, we will be adding approximately 1 billion cubic feet per day of new firm capacity that will provide safe and reliable transportation of clean-burning, domestic natural gas supplies to key Northeast markets.”

Aubrey McClendon, CEO of Chesapeake, said: “We are pleased to enter into this agreement with El Paso. It continues our practice of contracting for strategic pipeline capacity, which in this case provides access to premium northeast markets for our growing Marcellus production in Northeast Pennsylvania.”