2018 U.S. Natural Gas Pipeline Report: Natural Gas Demand to Drive New Pipeline Construction Until 2035

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A study released in June found that the United States and Canada will require annual average natural gas, oil and natural gas liquids midstream infrastructure investment of about $44 billion per year, from 2018 through 2035.

The report, “North American Midstream Infrastructure through 2035: Significant Development Continues,” conducted by ICF on behalf of the INGAA Foundation, updates a 2016 infrastructure report to reflect the changes in the natural gas, NGL and oil industry in recent years.

“While we now are in the midst of a remarkable expansion of the pipeline network, this report confirms that there will remain a need for new pipeline infrastructure,” said INGAA Foundation President Don Santa. “Continued production growth, combined with growing consumption, particularly for natural gas, will drive the need for expanded pipeline capacity to supply energy consumers in both domestic and export markets.”

Natural gas infrastructure makes up over half of the needed energy infrastructure identified in the report, with total investments forecast at $417 billion, or an average of $23 billion annually, from 2018 through 2035. Natural gas infrastructure includes gathering and transmission pipelines, compressors, laterals, gas-lease equipment, processing, gas storage and LNG export facilities. Low natural gas prices have fostered growth in the power generation market as coal and nuclear plants continue to be retired across the United States.

The U.S. Northeast is currently seeing strong activity, with a number of pipelines coming online or in various stages of construction. The following is a roundup of some of the more significant natural gas pipeline projects currently under development in the United States.

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 underground 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. 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. Three compressor stations have been planned as part of this project: one at the beginning of the pipeline in West Virginia, one in central Virginia and one near the Virginia-North Carolina state line. The project is currently delayed following the Virginia State Air Pollution Control Board’s decision on Nov. 9 to defer action on the Buckingham Compressor Station draft air permit until Dec. 10.

Constitution Pipeline Project

Location: New York, Pennsylvania
Stakeholder(s): Williams
Overview: Approved by Federal Energy Regulatory Commission (FERC) in December 2014, the estimated $700 million Constitution Pipeline consists 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 petitioned FERC to waive a state-issued water permit, but the U.S. Supreme Court rejected the project’s challenge over the New York water permit on April 30. In July, Williams announced plans to appeal the decision, and on Nov. 5 FERC granted the project stakeholders a two-year extension.

Gulf Coast Express Pipeline

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 $1.75 billion Gulf Coast Express Pipeline. The project is designed to move 1.98 billion cubic feet per day (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 fully subscribed and expected to be in service in October 2019.

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 to carry shale gas from West Virginia to markets in Virginia. The pipeline was targeted to be in service by the fourth quarter of 2018, but construction was suspended in October when the U.S. Army Corps of Engineers’ Pittsburgh District suspended the project’s water crossing permits.

NEXUS Gas Transmission

Location: Ohio, Michigan, Chicago, Ontario
Stakeholder(s): DTE Energy and Enbridge (Spectra Energy)
Overview: The NEXUS Gas Transmission (NGT) system was designed to address pipeline transportation infrastructure needs in the upper U.S. Midwest and eastern Canada 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 originates in northeastern Ohio and includes approximately 255 miles of large diameter pipe, 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. Although the project experienced delays, construction is complete and the pipeline was placed into service in October.

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). FERC approved the project in January. However, the New Jersey Department of Environmental Protection rejected the project’s water permits in February. However, despite opposition, PennEast expects to begin construction in 2019.

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. FERC approved the start of service on the pipeline’s final two laterals on Nov. 3. Portions of the pipeline have been operational for more than a year, but Energy Transfer required additional approval to add a receipt point and delivery point for natural gas production in West Virginia.

Utica Marcellus Texas Pipeline

Location: Kentucky, Louisiana, Mississippi, Ohio, Pennsylvania, Tennessee and Texas
Stakeholder(s): Tennessee Gas Pipeline (Kinder Morgan)
Overview: Kinder Morgan announced it was canceling the Utica Marcellus Texas Pipeline (UMTP) project on Oct. 18. The project was designed to transport purity and mixed natural gas liquids produced from the Utica and Marcellus areas to delivery points along the Texas Gulf Coast. The proposed project involved 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.

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 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 March, June and July/August. The next update will be March 2019, 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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