Marcellus-Utica Development Continues to Drive New Pipelines

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Production in the Marcellus and Utica shale plays continues to drive the development of new pipelines to connect underserved regions in the Northeast United States and supply additional capacity to the rest of the United States and into Canada.

However, permitting delays have stalled projects. A lack of a quorum within the Federal Energy Regulatory Commission (FERC) caused a large backlog of projects awaiting approval. The good news is that FERC now has a full complement of commissioners, but the bad news is that it will take some time before it sorts through the pile of pipeline projects that aim to supply natural gas to the rest of North America.

The following is a roundup of some of the more significant natural gas pipeline projects currently under development.

Alaska LNG Project

Location: Alaska
Stakeholder(s): Alaska Gasline Development Corp. (AGDC), ExxonMobil, BP, ConocoPhillips and TransCanada
Overview: The Alaska LNG project has become a state-led venture. In September 2016, the state of Alaska (through the AGDC) and ConocoPhillips Alaska Inc. executed a Memorandum of Understanding (MOU) regarding negotiations to form a joint venture company that could facilitate marketing LNG from the Alaska LNG project to global markets and acquire North Slope gas, with the goal of bringing LNG buyers and North Slope wellhead sellers together. AGDC and ConocoPhillips also intend to pursue the support of the other major North Slope producers in the formation of the joint venture. This MOU is part of AGDC’s broader plan to position the Alaska LNG Project for a front-end engineering and design (FEED) decision. The project includes a gas treatment plant, a liquefaction facility and an 800-mile, 42-in. pipeline from the North Slope production area to Nikiski, Alaska, with a maximum capacity of 3.3 billion cubic feet per day (Bcf/d). In November, China’s largest oil company, Sinopec, signed a non-binding agreement to explore development of the $43 billion project. However, it remains uncertain if the deal will be finalized to provide enough funding to back the project. The developers anticipate construction beginning in 2018, with an in-service date no later than 2025.

Atlantic Coast Pipeline

Location: West Virginia, Virginia, North Carolina
Stakeholder(s): Dominion Energy, Duke Energy, Piedmont Natural Gas, Southern Company Gas
Overview: The 600-mile Atlantic Coast Pipeline will originate in Harrison County, West Virginia, travel to Greensville County, Virginia, with a lateral extending to Chesapeake, Virginia, and then continue south into eastern North Carolina, ending in Robeson County. Two additional, shorter laterals will connect to two Dominion Energy electric generating facilities in Brunswick and Greensville counties. The proposed route was developed after more than two years of extensive study and landowner engagement. More than 6,000 miles of potential routes were carefully studied before choosing the best route with the least impact. After consulting with landowners and performing extensive field surveys, more than 300 additional route adjustments were made to avoid environmentally sensitive areas and address individual landowner concerns. In addition, three compressor stations have been planned as part of this project: one at the beginning of the pipeline in West Virginia (Lewis County), one in central Virginia (Buckingham County) and one near the Virginia-North Carolina state line (Northampton County, North Carolina). FERC approved the project’s Certificate of Public Convenience and Necessity on Oct. 13. The project also secured open space easements from the Virginia Outdoors Foundation on Oct. 16, and approval from the U.S. Forest Service. Dominion expects to secure final approval on the project by year’s end.

Atlantic Sunrise Project

Location: Pennsylvania
Stakeholder(s): Williams
Overview: Greenfield construction on the $3 billion Atlantic Sunrise pipeline began in September. The project is designed to connect producing regions in northeastern Pennsylvania to markets in the Mid-Atlantic and southeastern states. The project will add 1.7 Bcf/d of pipeline capacity to Williams’ Transco system. The project will consist of compression and looping of the Transco Leidy Line in Pennsylvania, along with the new Central Penn Line, connecting the northeastern Marcellus producing region to the Transco mainline near Station 195 in southeastern Pennsylvania. Additional existing Transco facilities are being added or modified to allow gas to flow bidirectionally. The preliminary project design includes a total of approximately 183 miles of new greenfield pipe (Central Penn North and Central Penn South), two pipeline loops totaling about 12 miles (Chapman Loop, Unity Loop), two and half miles of existing pipeline replacement, two new compressor facilities in Pennsylvania, and other facility additions or modifications in five states (Pennsylvania, Maryland, Virginia, North Carolina, South Carolina). The project has faced some legal challenges in Pennsylvania. However, Williams expects to place the project into full service by mid-2018.

Constitution Pipeline Project

Location: New York, Pennsylvania
Stakeholder(s): Williams
Overview: Approved by FERC in December 2014, the estimated $700 million Constitution Pipeline has been designed to consist of a new 30-in., approximately 125-mile pipeline with a capacity to transport 650 million cubic feet per day (MMcf/d) of natural gas from the Marcellus shale to consumers in throughout New York, including New York City, Long Island, Westchester, the Hudson and Mohawk Valley, the North Country and Southern Tier. The project has been delayed by the rejection of state permits by the New York regulators. Williams has petitioned FERC to waive a state-issued water permit to allow the project to continue forward. Current estimates for placing the pipeline in service is 2019.

Gulf Coast Express Pipeline Project

Location: Texas
Stakeholder(s): Kinder Morgan, DCP Midstream, Targa Resources
Overview: In October 2017, Kinder Morgan, DCP and Targa Resources signed a letter of intent to jointly develop the proposed Gulf Coast Express Pipeline. The project is designed to move 1.7 Bcf/d of gas from the Permian Basin to markets along the Texas Gulf Coast. The proposed 430-mile, 42-in. pipeline stretches from the Waha to Agua Dulce, Texas. The project is expected to be in service in the second half of 2019.

Leach XPress Project

Location: Ohio, West Virginia
Stakeholder(s): TransCanada (formerly Columbia Pipeline Group)
Overview: TransCanada acquired Columbia Pipeline Group in July 2016. In September 2016, FERC released its final environmental impact statement (FEIS) regarding the proposed Leach XPress project, which involves construction of approximately 160 miles of natural gas pipeline and compression facilities in southeastern Ohio and West Virginia’s northern panhandle. The roughly $1.4 billion investment will enable the safe transport of approximately 1.5 billion cubic feet (Bcf) of natural gas from the heart of the Appalachian supply basin to natural gas consumers served by the Columbia Gas and Columbia Gulf pipeline systems. The project is currently under construction. Delayed from its original targeted in-service date of November, TransCanada anticipates commissioning the pipeline in early 2018.

Mountain Valley Pipeline

Location: West Virginia, Virginia
Stakeholder(s): EQT Corp. (EQT Midstream Partners), NextEra US Gas Assets, Con Edison Transmission, WGL Midstream, RGC Midstream
Overview: The 303-mile, $3.5 billion Mountain Valley Pipeline is being developed by Pittsburgh-based EQT Corp. and partners to carry shale gas from West Virginia to markets in Virginia. The project has been approved by FERC, but still must obtain necessary state permits. The project has faced pushback from environmentalist groups in Virginia and is the subject of a legal challenge over the use of eminent domain and violation of the Natural Gas Act. The project developers previously secured water permits in West Virginia, but the state Department of Environmental Protection withdrew the permits in response to allegations that the state’s review was inadequate. Construction was supposed to begin in the fourth quarter this year, but has been delayed. The pipeline is targeted to be in service by the fourth quarter of 2018.

NEXUS Gas Transmission

Location: Ohio, Michigan, Chicago, Ontario
Stakeholder(s): DTE Energy and Enbridge (Spectra Energy)
Overview: FERC issued its FEIS for NEXUS in November 2016, which eliminated proposed route alternatives from further consideration. The commission evaluated alternatives but found that “none of these would offer a major environmental advantage over the proposed route,” according to the statement. The NEXUS Gas Transmission (NGT) system was designed to address pipeline transportation infrastructure needs in the upper U.S. Midwest and eastern Canadian regions by transporting natural gas supplies from Appalachian shale plays and serve local distribution companies, power generators and industrial users in these markets. The NGT project will originate in northeastern Ohio, include approximately 255 miles of large diameter pipe and be capable of transporting at least 1.5 Bcf/d of natural gas. As proposed, the path will use both existing and expansion capacity on the DTE Gas transportation system and the Vector Pipeline System to access Michigan markets, Chicago and the Dawn Hub in Ontario. The project is currently under construction, but continues to face legal challenges in Ohio. Construction was halted in Green, Ohio, after a Nov. 22 appeals court ruling. The pipeline is expected to be in service by the third quarter of 2018.

PennEast Pipeline Project

Location: New Jersey, Pennsylvania
Stakeholder(s): UGI Energy Services
Overview: Representing a nearly $1 billion investment, the 120-mile, mostly 36-in. PennEast Pipeline will originate in Dallas, Luzerne County, in northeastern Pennsylvania, and terminate at Transco’s pipeline interconnection near Pennington, Mercer County, New Jersey (approximately one-third of the route is located in New Jersey). The project is awaiting final FERC approval before reapplying for state permits. Pending regulatory approval, pipeline construction is expected to begin in 2018 and take approximately seven months to complete.

Rover Pipeline

Location: Pennsylvania, West Virginia, Ohio and Michigan.
Stakeholder(s): Energy Transfer
Overview: The $4.2 billion Rover Pipeline project is a new interstate natural gas pipeline system that will transport 3.25 Bcf/d of natural gas through approximately 713 miles of 24-, 30-, 36-, and 42-in. diameter underground pipeline through Pennsylvania, West Virginia, Ohio and Michigan. The project also includes the installation of four new mainline compressor stations and six new supply compressor stations, associated meter stations and other aboveground ancillary facilities. The project is designed to carry Marcellus and Utica shale gas to the Dawn Hub in Ontario. Some portions of the pipeline are already in service, while construction continues on other segments. The project has faced delays related to multiple drilling fluid leaks, including a 200-gallon leak reported on Nov. 17 by the Ohio EPA. Rover Pipeline donated $30,000 to emergency responders in three Ohio counties on Nov. 29 as part of a program to donate $10,000 to each county the pipeline crosses for a total of $270,000. The pipeline is expected to be placed fully into service by the end of the first quarter 2018.

Utica Marcellus Texas Pipeline

Location: Kentucky, Louisiana, Mississippi, Ohio, Pennsylvania, Tennessee and Texas
Stakeholder(s): Tennessee Gas Pipeline (Kinder Morgan)
Overview: Kinder Morgan continues to develop its Utica Marcellus Texas Pipeline (UMTP) project, which is designed to transport purity and mixed natural gas liquids produced from the Utica and Marcellus areas. Products will be transported in batches to delivery points along the Texas Gulf Coast. In February 2015, the company filed for abandonment of a Tennessee Gas Pipeline (TGP) line with the FERC, which was approved in November. The proposed project involves the abandonment and conversion of 964 miles of natural gas service on TGP, the construction of approximately 200 miles of new pipeline from Louisiana to Texas, and new storage capacity and laterals in Ohio, all with an anticipated in-service date in the fourth quarter of 2018. The pipeline will provide connectivity to major processing and fractionation hubs in the basin and will have a maximum design capacity of 430,000 barrels per day (bpd). The Allegheny Defense Project, a non-profit environmental group in Pennsylvania, filed a court document on Oct. 30, urging FERC to rehear the project it approved on Sept. 29.

Utopia Pipeline

Location: Ohio
Stakeholder(s): Kinder Morgan
Overview: Kinder Morgan is ahead of schedule in building the approximately $540 million Utopia Pipeline project. The company has revised its expected in-service date from January 2018 to the end of December. The Utopia Pipeline will have an initial design capacity of 50,000 bpd, and will move ethane from Ohio to Windsor, Ontario, Canada. The project is fully supported by a long-term, fee-based transportation agreement with a petrochemical customer.

This is not a comprehensive list of the natural gas pipeline projects in the United States. For updates regarding ongoing projects, refer to the Project Roundup on page 14 and published every issue.
North American Oil & Gas Pipelines provides quarterly updates of oil and gas pipeline projects in the United States in Canada. Previous reports were published this year in February, May and August. The next update will be February 2017, covering Canadian oil pipeline projects.

Bradley Kramer is managing editor of North American Oil & Gas Pipelines. Contact him at bkramer@benjaminmedia.com.

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