U.S. Pipeline Market Sees Buildouts in Permian, Other Hotspots

Researched by Industrial Info Resources (Sugar Land, Texas)--As the U.S. reports record production of natural gas, in addition to record exports of the fossil-fuel resource and natural gas liquids (NGL), developers of large-scale, commercial gas pipelines are rushing to meet demand for takeaway capacity from some of North America's busiest hotspots, such as the Permian Basin and the Marcellus and Utica shale plays. Industrial Info is tracking more than $7.3 billion worth of active, U.S.-based natural gas pipeline projects that are set to begin construction in the second quarter, of which Industrial Info's researchers believe about $6 billion worth have a medium-to-high likelihood (70% or more) of beginning as planned.

Click on the image at right for a graph detailing the top 10 parent companies for U.S.-based natural gas pipeline projects that are set to kick off from April through June, by total investment value.

Eastern Shore Natural Gas (ESNG), the interstate natural gas pipeline subsidiary of Chesapeake Utilities Corporation (NYSE:CPK) (Dover, Delaware), leads all other project developers in its investment in second-quarter kickoffs, thanks to the expansion of its East Coast pipeline system. The Market Hub Services and Pipeline Expansion Project will transport 1 billion cubic feet per day of gas across four states to the Delmarva Peninsula, which includes all of Delaware and the easternmost areas of Maryland and Virginia. Major segments include the:

• $210 million portion from Chester, Pennsylvania, to Wilmington, Delaware, which is expected to run 55 miles; see project report
• $175 million portion from Wilmington, Delaware, to Elkton, Maryland, which is expected to run 72 miles; see project report
• $620 million portion from Elkton, Maryland, to Accomac, Virginia, which is expected to run 162 miles; see project report

All major segments are expected to be completed in the summer of 2024 and will be joined by one compressor station in each of the four states, each valued at $45 million. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipeline Project Database can click here for a list of compressor-station project reports.

"The build-out of infrastructure is a massive challenge in the United States today," said Nick Dell'Osso, the chief executive officer of Chesapeake, in a recent earnings-related conference call. "We would love to see more infrastructure built in Northeast U.S., where there are vast resources of gas that will wait for room and infrastructure to be delivered to market. If we saw more pipe built throughout all of Appalachia, including the area that we operate in Northeast Pennsylvania as well as Southwest Appalachia, I think it [would] change the game on how the dynamics of the cost curve for U.S. gas works."

WhiteWater Midstream (Austin, Texas) announced its final investment decision last spring to move forward with the Matterhorn Express Pipeline, after securing sufficient firm transportation agreements with shippers. The pipeline, which is being developed in a partnership with EnLink Midstream LLC (NYSE:ENLC) (Dallas, Texas), Devon Energy Corporation (NYSE:DVN) (Oklahoma City, Oklahoma) and MPLX LP (NYSE:MPLX) (Finlay, Ohio), is designed to carry up to 2.5 billion cubic feet per day about 490 miles from Waha, Texas, which sits at the heart of the Permian Basin, to the Katy area near Houston.

Shawn Lyon, the senior vice president of Logistics and Storage for MPLX, said in a recent earnings call that the Matterhorn Express is one of several projects intended to address the growing gap between demand for Permian-based gas and the infrastructure necessary to carry it to customers. "That really matches our producer and customers' needs coming out of there," Lyon said. "You're going to see volatility up and down on natural gas. But there's strong volume demand for the gas takeaway out of the Permian."

Subscribers can learn more about the Matterhorn Express in a detailed project report, and can click here for a list of related compressor-station project reports.

ANR Pipeline Company, a subsidiary of TC Energy Corporation (NYSE:TRP) (Calgary, Alberta), is expanding its system of pipelines out of the Utica and Marcellus shale plays. The 125-mile addition will run from Defiance, Ohio, to Bridgman, Michigan, carrying up to 550 million standard cubic feet per day of natural gas. Subscribers can read detailed reports on the 55-mile Ohio portion and the 70-mile Michigan portion.

Subscribers to Industrial Info's GMI Project Database can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of reports for natural gas pipeline projects set to begin construction across the U.S. in second-quarter 2023.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).