By 2017, natural gas pipelines are projected to convert up to 32% of their pipeline capacity into the Northeast to support the bi-directional flow of natural gas out of the region to the South and West, according to a U.S. Energy Information Administration (“EIA”) December 2, 2014 report. It is well known that the increased production of natural gas in the shale plays of the Northeast have had a marked impact on the energy industry in the U.S. This EIA data shows us in hard numbers how drastic of an impact the shale boom has had on pipelines that historically transported natural gas into the Northeast: six pipelines transported 60% of natural gas into the Northeast in 2013, and 2013 volumes of gas transported into the Northeast on these six pipelines were 21%-84% lower than the volumes of gas they transported into the region just five years earlier. Several of these pipelines initiated the transition to handle bi-directional flows in 2013 and earlier this year.
With this marked reduction of flow into the Northeast, pipelines are planning to convert existing infrastructure to support bi-directional flow and to construct new infrastructure to carry gas out of the region. By 2017, the EIA projects the addition of 8.3 billion cubic feet per day (Bcf/d) of bi-directional capacity to existing pipelines in the Northeast. The recent EIA data reflects plans for bi-directional expansion of existing projects to outpace the construction of new infrastructure in 2015-2016, with the addition of 2-3 Bcf/d of bi-directional capacity planned for each of those years. In 2017, an additional 2-3 Bcf/d of bi-directional capacity via modification of existing pipelines is planned, but there are plans to construct new infrastructure to handle slightly larger flows out of the Northeast. EIA stated that the growth of natural gas production has prompted plans for the addition of 35 Bcf/d of pipeline capacity over and above the plans for bi-directional modifications of existing pipeline.
You can read our previous posts on this topic which discuss several of the planned/completed bi-directional pipeline projects and regulatory issues associated with shifting the traditional flow of natural gas.
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