Atlantic Coast natgas pipe cancellation poses supply challenges -Dominion

July 6 (Reuters) - Dominion Energy Inc said cancellation of the $8 billion Atlantic Coast natural gas pipeline in the United States would present challenges in meeting growing demand but that increased supply of clean energy should fill some of the gap.

Dominion was building the pipeline to meet growing gas demand in southeast Virginia and eastern North Carolina. The project was the latest of several in the United States abandoned after long delays in the approval process and as the fall in demand caused by coronavirus makes the case for more capacity less pressing.

Dominion and its partner in the project, Duke Energy Corp , said on Sunday they abandoned the 600-mile (966-km) project, which was billions of dollars over budget and years behind schedule.

"These communities still need new infrastructure for electric and gas reliability and economic development," Dominion spokesman Aaron Ruby said. "The cancellation ... will leave some significant challenges unaddressed."

The pipeline would have supplied enough gas for about 7.5 million U.S. homes a day.

Analysts at Wood Mackenzie said the real losers from the cancellation would be power consumers in the U.S. Southeast, including units of Duke, Dominion and Southern Co that will need to find other gas supplies to fuel the region's coal-to-gas switching efforts.

Before state governments imposed coronavirus lockdowns, the U.S. Energy Information Administration (EIA) forecast gas demand would reach record highs almost every year through 2050.

EIA now projects U.S. demand will drop about 4% in 2020 and another 4% in 2021 from a record high in 2019.

Dominion plans to invest up to $55 billion over the next 15 years on zero-carbon generation, energy storage, gas distribution replacement and renewable natural gas.

Dominion aims to achieve net-zero carbon dioxide and methane emissions from its power generation and gas infrastructure operations by 2050.

(Reporting by Scott DiSavino; Editing by Simon Webb and Peter Cooney)