Permian, Other Shale Plays Drive $4.4 Billion of U.S. Gas Pipeline Kickoffs in First Quarter

Researched by Industrial Info Resources (Sugar Land, Texas)--Natural gas production in the Permian Basin has slowed from the record levels of 2016 and 2017, but pipeline companies still see plenty of promise in the West Texas shale play. Other high-production areas, such as the Bakken, Marcellus and Utica, are benefiting midstream companies as natural gas prices remain low. Industrial Info is tracking nearly $4.4 billion worth of natural gas pipeline-related projects set to begin construction in the U.S. in the first quarter, about half of which is attributed to projects in Texas.

Click on the image at right for a graph detailing the top 10 U.S. states for natural gas pipeline-related project kickoffs from January through March.

One of the largest pipeline projects in Texas is expected to see key components begin construction toward the end of the first quarter: the Whistler Pipeline, which will transport roughly 2 billion cubic feet per day of natural gas about 450 miles from Waha, a city in the Permian Basin, to areas in southern Texas. The Whistler project is being jointly developed by Targa Resources Corporation (NYSE:TRGP) (Houston, Texas), NextEra Energy Resources (NYSE:NEE) (Juno Beach, Florida), WhiteWater Midstream (Austin, Texas) and MPLX LP (NYSE:MPLX) (Findlay, Ohio).

Although the two major legs of the pipeline itself--an estimated $725 million segment from Waha to Agua Dulce and an estimated $350 million segment from Agua Dulce to Wharton County--are unlikely to begin construction until late in the second quarter, a series of compressor stations, each valued at $75 million, are expected to kick off across Texas in March. For more information, see Industrial Info's project reports on the Waha-Agua Dulce and Agua Dulce-Wharton segments, and click here for a list of project reports on the compressor stations.

Last month, the companies involved announced the beginning of a binding open season to solicit commitments for the remaining capacity on the Whistler Pipeline. It is set to conclude on Monday, December 16.

Demand for takeaway capacity from the Permian Basin has been a significant boon to pipeline companies. But production growth in the Marcellus and Utica shale plays, based largely in Ohio and Pennsylvania, are fueling similar demand in the U.S. northeast for lines that reach as far as the Texas coast. In Ohio, Summit Midstream Partners (NYSE:SMLP) (The Woodlands, Texas) is considering an estimated $120 million segment for its Utica Pipeline Project, which would carry 500 million standard cubic feet per day of natural gas from southeastern Ohio to connect with a separate line in development in Ohio's Delmont, Jefferson and Harrison counties.

In Pennsylvania, Dominion Energy Incorporated (NYSE:D) (Richmond, Virginia) is considering an estimated $80 million addition to its West Loop Project that would transport up to 150 million standard cubic feet per day of natural gas about 5 miles within Beaver County, which sits atop the Utica Shale. On the eastern side of the state, New Jersey Resources Corporation (Belmar, New Jersey) is looking into the estimated $115 million Adelphia Gateway Project, which would carry up to 250 million standard cubic feet per day from Delaware to Northampton counties. For more information, see Industrial Info's project reports on the Utica Pipeline, West Loop and Adelphia Gateway segments.

North Dakota's Bakken Shale has made national headlines for its enormous potential and rapidly developing industry, and ONEOK Incorporated (NYSE:OKE) (Tulsa, Oklahoma) is considering an estimated $100 million lateral to connect its planned Lonesome Creek Natural Gas Processing Plant to a connection with its Elk Creek Pipeline. It is expected to run about 75 miles. For more information, see Industrial Info's project report.

In addition to the above-mentioned capital-spending projects, Industrial Info is tracking about $28 million worth of maintenance-related projects that are set to kick off on pipelines and at pipeline-related facilities across the U.S. in the first quarter. Click here for a list.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.