U.S. to See $11 Billion in Natural Gas Pipeline Kickoffs this Summer, Fueled by Shale Plays

Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial Info is tracking nearly $11 billion worth of natural gas-oriented midstream projects that are set to begin construction in the U.S. this summer, the bulk of them in or near high-growth areas such as the Permian Basin or the Marcellus and Utica shale plays. But the need for more capacity among producers isn't the only factor, as gas and gas-related exports have become central to U.S. energy, driving the need for midstream access to coastal areas.

Click on the image at right for a map detailing natural gas pipeline projects set to begin construction from now through the end of September within the continental U.S..

Pennsylvania leads all other U.S. states in the number of pipeline projects set to kick off this summer, including two major segments of New Jersey Resources Corporation's (Belmar, New Jersey) Adelphia Gateway Project: the estimated $115 million mainline, which will run 84 miles and provide the greater Philadelphia market with 250 million standard cubic feet per day of domestically produced natural gas, and an estimated $35 million substation near Media, Pennsylvania, which will service the line.

The U.S. Federal Energy Regulatory Commission (FERC) issued a favorable environmental assessment for Adelphia Gateway early this year, while Pennsylvania's Department of Environmental Protection approved the compressor station in April. For more information, see Industrial Info's project reports on the mainline and compressor station.

In March, FERC granted approval to a pipeline project originating in Pennsylvania: National Fuel Gas Supply Corporation's (Williamsville, New York) Empire North expansion, which would bolster an existing system that transports natural gas from the New York-Pennsylvania border to various local distribution companies and end-users in western and central New York and Canada. The company is preparing to begin construction on a $75 million compressor station in Millerton, Pennsylvania, which sits on the border with New York, to service the improved Empire North service. For more information, see Industrial Info's project report.

Texas and Oklahoma traditionally are home to some of the busiest activity in the Oil & Gas Pipeline Industry, including one of the highest-valued projects set to begin construction this summer: Boardwalk Pipeline Partners LP's (NYSE:BWP) (Houston, Texas) $600 million P2K Pipeline in Texas, which will carry 2 billion cubic feet per day of natural gas about 385 miles from the Waha Hub in the Permian Basin to Katy, and Howard Midstream Energy Partners LLC's (Houston) $150 million gathering system in Oklahoma's Dewey and Custer counties, which will transport 110 million standard cubic feet per day of natural gas from a multi-well pad development from the STACK play to various points throughout the state. For more information, see Industrial Info's reports on the Texas and Oklahoma projects.

Ohio joins Texas, Oklahoma and Pennsylvania as one of the nation's pipeline hotspots, fueled by the rapid growth in the Marcellus and Utica shale plays it shares with Pennsylvania. Columbia Gas Transmission LLC, a subsidiary of TransCanada Corporation (NYSE:TRP) (Calgary, Alberta), is hoping to overhaul its Buckeye XPress system, a vital natural gas supply line for the state, by replacing aging components and boosting overall capacity. FERC granted a favorable environmental assessment for the project last month.

Columbia Gas aims to replace about 61 miles of older pipeline in Ohio with about 66 miles of higher-capacity line to increase capacity by 275 million standard cubic feet per day. About $270 million in replacements in Vinton and Jackson counties would be accompanied by a $35 million unit addition at a compressor station near Jackson and a $30 million unit addition at another station near Summerfield to accommodate the growth. For more information, see Industrial Info's reports on the replacement project and the Jackson and Summerfield stations.

None of these project kickoffs are guaranteed. U.S. midstream projects, especially those in their planning stages, are subject to sudden changes and long-lasting alterations in spending and start dates. Roughly 60% of the $11 billion in total investment value for pipeline projects set to begin this summer is attributed to projects that already have seen their kickoff dates slip more than two years.

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