Shale gas supplies prompt pipeline building frenzy
Gas delivery services race to keep up to new supplies
“These construction projects, as well as other transportation additions out of the north Texas and Rockies producing regions and additions related to LNG projects, have already had an impact on regional pricing dynamics,” the EIA said. “For example, REX-West has allowed for greater integration of the Rockies and Midcontinent markets, such that prices in the two regions appear to trade in sync, with only transportation costs separating price quotes on average.”
Pipeline additions in the U.S. Southwest and Gulf of Mexico region last year were “massive,” the agency said. “Capacity additions of 22.6 billion cubic feet per day were three times the level of the previous year, while the 2,211 kilometers of new pipeline was nearly double the previous year’s addition of 1,120 kilometers of pipeline. The estimated cost of the infrastructure additions was $3.3 billion, compared with the 2007 total of $2.5 billion.”
Of the 30 projects constructed in the Southwest, 13 were related to new pipelines or expansions in northeast Texas or to new gas flows from development of supplies from the Barnett, Woodford or Fayetteville shale formations.
In the southeastern U.S., 19 pipeline expansions were completed during 2008, adding 10.1 billion cubic feet per day of capacity and 1,426 kilometers of new pipeline.
In the northeastern U.S., 15 pipeline projects were completed in 2008, adding five billion cubic feet of daily delivery capacity and 786 kilometers of new pipeline. Construction continues in the region. The largest projects so far link LNG import terminals to markets from Maryland to Massachusetts. But development of the Marcellus Shale in Pennsylvania and New York is spurring more pipeline construction plans.
Susan Parker writes for the Natural Gas Intelligence family of newsletters covering natural gas and power news and prices, accessible at intelligencepress.com
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