Texas Eastern Transmission Pipeline to Double in Capacity
A huge influx of oil and natural gas production has been the result of new technologies that make extracting resources from shale plays economically feasible. These plays are located across the country, and the growth has been so rapid it has created serious infrastructure issues for midstream companies across the country.
Those in the East are experiencing the most change due to the success of the Marcellus and Utica shale plays. The region around these plays is seeing 88 percent of the projects underway to increase the capacity of transportation pipelines.
The production of gas from the Marcellus alone has seen a substantial increase, rising from 1.2 billion cubic feet per day to around 14.8 billion cubic feet per day in the past seven years. By the year 2020, experts speculate that this amount could increase even more, to between 23 to 25 billion cubic feet per day.
The ability to process and transport these natural resources is critical to the continued success of the industry and to the economic success of the country. These pipelines are not enough, though. The growing industry needs options to transport resources to Canada and the Northeastern states to prevent future negative impacts from major storm systems that leave areas without adequate stores.
Current midstream activities to expand the infrastructure for the Marcellus include new pipeline construction, existing pipeline expansion and the reversal of natural gas lines that used to transport resources up from the Gulf Coast. Using these pipelines, exploration and production companies are now shipping oil and natural gas out to many different regions and markets.
The Texas Eastern Transmission pipeline and the Transcontinental Gas and Tennessee Gas Pipeline companies have experienced the most activity, and have been the focus of many projects in order to fix bottlenecks of resources and prevent future issues. The growth opportunities for these eastern pipelines reverse the traditional flow of natural gas.
One interstate pipeline slated for significant expansion by the end of 2014 is the Texas Eastern Transmission, which stretches from the Pennsylvania, New Jersey and New York area across more than 9,000 miles to the Gulf Coast region. This project is one of several that Spectra Energy, based in Houston, has planned to complete in the next three years.
The expansion is expected to cost $500 million, and will increase the capacity of the system by 600 million cubic feet per day. The drilling companies anchoring the system are Chevron and EQT Corp, which is based in Pittsburg. These companies will each ship at least 300 million cubic feet per day of natural gas.
The good news is that the price tags on these projects have come down significantly. In the earlier years of the production boom, this type of expansion would have cost billions of dollars. Current projects, such as the Texas Eastern Transmission pipeline, are down to hundreds of millions.
Earlier this year, experts estimated that over 1,300 Pennsylvania wells still have a backlog. In spite of the drop in prices and the utilization of the midstream transportation infrastructure already in place, the Marcellus play will need substantial investments in order to prepare for the continued growth of output.
Joseph Barone
President
ShaleDirectories.com
610.764.1232
www.shaledirectories.com