MANCHESTER — Thanks to neighborhood leadership and a projected infusion of revenue, a natural gas expansion project in the southeastern corner of town that was abruptly halted is likely to go forward, gas company officials and state legislators said Thursday.

About 70 residents of the Timrod Road neighborhood filled a banquet room at Manchester Country Club to hear the news from Roddy Diotalevi, senior director of sales and marketing for Connecticut Natural Gas.

Pending approval from the state Public Utilities Regulatory Authority, CNG will start laying new lines before Labor Day and complete the work by the end of September, Diotalevi said.

Responding to residents' interest in gas conversions, CNG began laying line in the neighborhood in the spring. Plans were to connect more than 100 homes, but last month, after hooking up about 65 homes, the company sent a letter to neighborhood residents saying that unexpected construction costs and a lack of signed agreements from homeowners had halted the project.

The gas company found that expected revenue would not balance with the construction costs for the remainder of the project, Diotalevi said.

But the notification angered residents who said they had been promised natural gas, which is much cheaper now than heating oil. Some had removed their oil tanks, hired heating contractors and even made deposits on conversions, Betsy Karhu of Tam Road said after the meeting.

Two factors proved crucial to the company's decision to continue the project, gas company officials and state legislators who attended the meeting said. The first was leadership from Karhu and Carole Phelps of Timrod Road, according to state Sen. Steve Cassano, D-Manchester.

"The reason this happened is that you had leadership in your neighborhood," Cassano said. "People came to meetings in droves."

The other factor, Diotalevi said, is the prospect of getting revenue that normally would be returned to existing customers. The company has requested permission from PURA to use money from excess gas sold when demand is lower than expected to offset the project's cost.

Diotalevi said he expects PURA to approve use of the so-called "non-firm margin" revenue next week. Cassano went a step further and said there is "no question in my mind" that regulators will approve CNG's request.

Expansion of natural gas service is a key component of the state government's comprehensive energy strategy. Late last year, regulators gave final approval to the Gov. Dannel Malloy's ambitious plan to expand the state's natural gas infrastructure, adding 280,000 new customers over 10 years.

Diotalevi said he accepted blame for the company's poor communication.

"We lived and learned the hard way," he said, "but I think we're in a good place and there's a smooth road ahead."