Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Plumbing Projects Pipeline Construction Ramps Up to Meet Marcellus Shale Production

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Plumbing Projects Pipeline Construction Ramps Up to Meet Marcellus Shale Production

Article excerpt

Over the next three years, the Marcellus Shale region can expect to see about 17 pipeline projects meant to ship about 17.3 billion cubic feet per day of natural gas out of Pennsylvania, West Virginia and Ohio to end-users, according to IHS Energy.

Those destinations "are varied, and in addition to New England, some are targeting the Midwest, eastern Canada and the South," said Matthew Piatek, associate director of North American natural gas for IHS, which tracks energy markets.

"Given the amount of production in the tri-state area currently, it will be able to satisfy the lion's share of Mid-Atlantic and New England demand and still export a net amount of natural gas," Mr. Paitek said.

The new infrastructure is in high demand. As natural gas production ramped up in the Marcellus and Utica regions, the existing pipeline network to take that fuel from well sites to market has been maxed out.

That has led to a supply glut and to depressed natural gas prices in Pennsylvania, even as neighboring New England and New York weathered dramatic natural gas price spikes during high-demand winter months.

"There will be significant relief with the buildout happening this year," said Lindsay Schneider, principal analyst with Wood Mackenzie's natural gas team.

Still, next summer could look a bit different from this one as low natural gas prices prompt drillers to pull back production, Ms. Schneider noted. Between 2014 and 2015, Wood Mackenzie estimates supply growth of about 2.1 billion cubic feet per day (Bcf/d) from the Marcellus. In 2015-2016, that is expected to fall to about 1.8 Bcf/d.

But even with a slowdown, production is expected to grow, Ms. Schneider said.

"The supply growth will have to catch up with pipeline capacity later this decade," she said. "That's very different than now, where exit capacity has to catch up with supply."

Waves of pipeline projects

Since the early days of Marcellus production - Range Resources was the first to begin producing natural gas from the shale formation in 2005 - pipeline projects have evolved.

One change is in who is driving demand for more pipelines. Now, more end-users are signing up to get the gas, rather than drillers pushing for the projects, said Mr. …

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