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FERC approves NGL pipeline project on TGP

02 Oct 2017 20:32 (+01:00 GMT)
FERC approves NGL pipeline project on TGP

Houston, 2 October (Argus) — The US Federal Energy Regulatory Commission (FERC) has approved a $412mn project that would allow Kinder Morgan to convert a 964-mile (1,551km) stretch of natural gas pipeline to carry NGLs from the northeast US to Texas.

The 430,000 b/d NGL system known as the Utica Marcellus Texas project will use infrastructure on Kinder Morgan's Tennessee Gas pipeline (TGP) system. The project will be capable of moving propane, butane, natural gasoline, and y-grade in batches from processing facilities near Scio, Ohio. It involves building 200 miles of new pipeline from Louisiana to Texas and will connect to a header system in Texas that can reach storage sites near Mont Belvieu.

Kinder Morgan plans to bring the pipeline on line in the fourth quarter of 2018.

The project underscores a transformation underway at cross-country gas pipelines such as TGP, Williams Partners' Transcontinental Gas (Transco) and Enbridge's Texas Eastern Transmission (Tetco). Those pipelines historically have provided a conduit for gas from the US Gulf of Mexico and large producing states such as Texas to key consuming markets in the northeast.

Those traditional south-to-north gas flows have reversed because of the advent of shale production and a surge in output from fields like the Marcellus and Utica, two gas- and liquids-rich formations close to key northeast consuming markets.

The operators of Tetco, Transco and TGP have converted those systems to bi-directional service, allowing low-cost northeast gas production to reach growing demand in the southeast from power plants and for exports to Mexico and overseas markets. Demand for NGLs from the northeast has also sprung up along the US Gulf coast.

TGP would lose about 230mn cf/d (6mn m³/d) of south-to-north gas capacity to the project, extending from compressor station 40 in Natchitoches Parish, Louisiana, to station 87 in Portland, Tennessee. The pipeline held an open season for that capacity in late 2013 but received no bids for service. The capacity north of station 87 will be replaced by planned additions to the TGP pipeline system, including new compression.

TGP has pipeline that runs parallel to the portions used for the NGL project that can meet customer needs for firm gas service. It will also build about 8 miles of new pipeline in Kentucky, four new compressor stations and add three new compressor units.