A new $5 billion natural gas pipeline will help Duke Energy Corp. (NYSE:DUK) to scale back its reliance on coal and serve more customers after its 2012 merger with Progress Energy Inc. The utility giant said this week that it will own 40 percent of the line that will run from West Virginia to the southeast corner of North Carolina.

Duke said the Atlantic Coast Pipeline will be built by Dominion Resources Inc. (NYSE:D), a major producer and transporter of energy based in Richmond, Virginia. Dominion will own 45 percent of the conduit, while two other partners, Piedmont Natural Gas Co. and AGL Resources Inc., will respectively own 10 percent and 5 percent shares.

When completed, the 550-mile pipeline will cut through the Marcellus and Utica shale gas basins in West Virginia, Ohio and Pennsylvania along the East Coast. It will carry up to 1.5 billion cubic feet of gas per day. Construction could start as soon as 2016, and the project could come online by winter 2018, according to a statement.

The companies said they don’t expect review and approval from the Federal Energy Regulatory Commission to hold up the project, but haggling over money with landowners could take several years, Mark Bridgers, a pipeline construction consultant, told The News & Observer. “The issues are going to come down to the easement and the rights of way. That’s going to be the biggest obstacle to get all that lined up,” he said to the Raleigh newspaper.

Duke spun off its own natural gas division as Spectra Energy Corp. (NYSE:SE) in 2007. But the utility now needs a steady supply of the lower-carbon fossil fuel, particularly for its customers in eastern North Carolina, Lynn Good, Duke’s chief executive, told the Wall Street Journal. The project will also help Duke diversify its energy mix, which is on track to be roughly split among coal, natural gas and nuclear by next year, she said.

The utility has closed half of its 14 coal-fired power plants in North Carolina over the last three years, and it has opened five natural gas-fired facilities there since 2011. Duke plans to open another natural gas plant in South Carolina in 2017, the statement said. 

The company is also in the middle of clean-ups related to two recent power plant accidents.

In August, at least 5,000 gallons of fuel oil spilled from Duke’s 60-year-old power plant near Cincinnati, causing the U.S. Coast Guard to close a 15-mile stretch of the Ohio River. Earlier this year, a sludge spill at a coal plant near Eden, North Carolina sent toxic coal ash floating down 70 miles of the Dan River. North Carolina’s legislature recently passed the Coal Ash Management Act, which establishes requirements for managing the power plant byproduct in the state.