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Northeast shale takeaway receives a boost

07 May 2018 16:46 (+01:00 GMT)
Northeast shale takeaway receives a boost

Houston, 7 May (Argus) — The US northeast last week received as much as a 1.55 Bcf/d (44mn m³/d) boost in natural gas takeaway capacity from the Appalachian shale region, and should get more than 1.7 Bcf/d more this summer as three additional pipeline projects designed to ship shale gas to more lucrative markets begin flowing.

The US Federal Energy Regulatory Commission (FERC) last week approved Energy Transfer Partners to start Phase 2 of its 3.25 Bcf/d Rover pipeline project, allowing that project to begin flows from Ohio to Michigan. Some construction work remains on the project, and its developers declined to say what flows the line can now operate at as a result of the FERC approval. The line began partial flows of 1.7 Bcf/d in December and has 1.55 Bcf/d left to go to reach its full design capacity.

Independent producer Antero Resources has capacity on Rover, and in late April said it was ready to bring as much as 400mn cf/d of production on line, likely as soon as Rover was approved to begin Phase 2 flows.

Columbia Gas Transmission's WB Xpress project is scheduled to begin partial flows in June in Virginia and West Virginia. That project's full capacity of 1.3 Bcf/d is expected to come on line in November. A smaller project on Tennessee Gas pipeline, the 193mn cf/d Broad Run Expansions project, in June will begin shipping gas from West Virginia through Tennessee and Kentucky.

And Transcontinental Gas pipeline's (Transco) Atlantic Sunrise project is on schedule to begin flows in July of 1.7 Bcf/d from Pennsylvania to markets in the mid-Atlantic and southeastern US.

In addition to Antero's capacity on Rover, Cabot Oil & Gas said it will ramp up output significantly in the second half of the year, bringing an additional 60 wells on line following start up on Atlantic Sunrise. The ability of Appalachian producers to ramp up output so quickly for these projects indicates a pressing need for more takeaway from the region in the coming months and years.

The 1.5 Bcf/d Nexus pipeline is the next large tranche of capacity to shuttle Appalachian gas to higher-priced markets. The project is expected to come on line in the third quarter and will boost flows from Ohio toward the northwest, reaching Michigan and Ontario. Texas Eastern Transmission's (Tetco) 918mn cf/d Appalachian Lease project should come on line around the same time, as that project is designed to deliver gas from Tetco into Nexus.

The largest increase in natural gas takeaway capacity will come in the fourth quarter of 2018 with more than 4 Bcf/d of projects scheduled to come on line, including EQT's 1.9 Bcf/d Mountain Valley pipeline — as well as its 580mn cf/d Equitrans expansion project designed to deliver gas to Mountain Valley — and Columbia Gas' 2.7 Bcf/d Mountaineer XPress. Dominion Transmission's 284mn cf/d Eastern Market Access project is also scheduled for late 2018.

Still more projects have just begun the regulatory filing process. National Fuel Gas' Line N to Monaca project would boost flows by 133mn cf/d in Pennsylvania in June 2019. Columbia Gas' Buckeye Xpress project would add 275mn cf/d to Ohio and West Virginia in late 2020. And Transco's Southeastern Trail project would ship 296mn cf/d from Virginia to the Gulf coast starting in November 2020.

National Fuel Gas last week said it is also partnerering with Transco on a new 290mn cf/d expansion to connect more production to Transco's Leidy Line. The project is still in the planning stages, and is currently targeted for start up in late 2021.