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Released September 03, 2014 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Last year, the Rockies Express Pipeline (REX) announced a plan to reverse a recently completed line and carry natural gas from the Marcellus/Utica Shale westward as far as Mexico, Missouri, very close to the Missouri-Illinois state border. The reversal would make the eastern end of the line between Clarington, Ohio and Mexico, Missouri (Zone 3) bidirectional, giving shippers the opportunity to reach not only local customers, but also more traditional markets such as the Gulf Coast or Southeast via interconnected pipelines. The west end of the pipeline is business-as-usual, providing takeaway capacity for Rockies shippers to the same markets, thus providing takeaway capacity from two separate regions with great need for access to customers.
View Project Report - 300136413
While natural gas supply from the Marcellus is plentiful and producers have scrambled to gain market access, demand issues in the Power and Chemical Processing industries in the shale itself and the lack of pipeline infrastructure have created high demand among producers for access to points west.
REX, operated under a partnership headed by Tallgrass Development LP and commissioned in 2009, was one of the largest pipeline projects to be completed in the U.S. in more than 20 years. The 1,679-mile pipeline carries natural gas from northwestern Colorado to eastern Ohio. With the Marcellus shale boom, the need for "imported" natural gas in the region declined, and Marcellus producers began to need a place to sell their newfound bounty as it outstripped local demand.
The demand for natural gas in the U.S. is centered on the Power and Chemical Processing industries, specifically in the ammonia, methanol and ethylene production processes. The states in the Marcellus Shale region are not known for their overabundance of ammonia, methanol and ethylene processing units, despite some motions by PCS Nitrogen, a part of Potash Corporation of Saskatchewan Incorporated (NYSE:POT) (Saskatoon, Saskatchewan), to expand its urea and ammonia units at its Lima Fertilizers plant. Access to the Gulf Coast is essential for selling to customers in the chemicals market.
It may seem like a bad set of circumstances for a pipeline to link one play in need of customers to another also in need of customers. However, with the interconnects to other lines connecting to the Gulf, Midwest, and South East markets, REX can serve to open up supply lines for both beleaguered dry gas plays. The bidirectionality of Zone 3 allows for flexibility should the demand situation in the Marcellus change in the coming years.
Natural gas-fired power capacity is booming in the region in and around the Marcellus Shale. Industrial Info is tracking more than 80 projects in the area, over half of which will add capacity. In total, these projects will add more than 24,000 megawatts (MW). Pennsylvania has the highest share of these projects with 17 total planned, nine of which will begin construction in 2015.
View Plant Profile - 1027896
Producers and shippers stand to profit from sending natural gas out of the Marcellus only if the supply of gas outstrips local demand--and demand exists elsewhere. With the development of so much power generation in the area, local demand for natural gas appears to increase over the next several years. By contrast, future demand in the Rockies appears to be holding steady with scant new demand. Even though both plays are currently seeking routes to send gas out of their local areas, by linking the two with each other and interconnecting lines headed to other markets, however the markets shift, REX will have a role to play.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 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.
View Project Report - 300136413
While natural gas supply from the Marcellus is plentiful and producers have scrambled to gain market access, demand issues in the Power and Chemical Processing industries in the shale itself and the lack of pipeline infrastructure have created high demand among producers for access to points west.
REX, operated under a partnership headed by Tallgrass Development LP and commissioned in 2009, was one of the largest pipeline projects to be completed in the U.S. in more than 20 years. The 1,679-mile pipeline carries natural gas from northwestern Colorado to eastern Ohio. With the Marcellus shale boom, the need for "imported" natural gas in the region declined, and Marcellus producers began to need a place to sell their newfound bounty as it outstripped local demand.
The demand for natural gas in the U.S. is centered on the Power and Chemical Processing industries, specifically in the ammonia, methanol and ethylene production processes. The states in the Marcellus Shale region are not known for their overabundance of ammonia, methanol and ethylene processing units, despite some motions by PCS Nitrogen, a part of Potash Corporation of Saskatchewan Incorporated (NYSE:POT) (Saskatoon, Saskatchewan), to expand its urea and ammonia units at its Lima Fertilizers plant. Access to the Gulf Coast is essential for selling to customers in the chemicals market.
It may seem like a bad set of circumstances for a pipeline to link one play in need of customers to another also in need of customers. However, with the interconnects to other lines connecting to the Gulf, Midwest, and South East markets, REX can serve to open up supply lines for both beleaguered dry gas plays. The bidirectionality of Zone 3 allows for flexibility should the demand situation in the Marcellus change in the coming years.
Natural gas-fired power capacity is booming in the region in and around the Marcellus Shale. Industrial Info is tracking more than 80 projects in the area, over half of which will add capacity. In total, these projects will add more than 24,000 megawatts (MW). Pennsylvania has the highest share of these projects with 17 total planned, nine of which will begin construction in 2015.
View Plant Profile - 1027896
Producers and shippers stand to profit from sending natural gas out of the Marcellus only if the supply of gas outstrips local demand--and demand exists elsewhere. With the development of so much power generation in the area, local demand for natural gas appears to increase over the next several years. By contrast, future demand in the Rockies appears to be holding steady with scant new demand. Even though both plays are currently seeking routes to send gas out of their local areas, by linking the two with each other and interconnecting lines headed to other markets, however the markets shift, REX will have a role to play.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 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.
