With domestic natural gas demand projected to increase by 3.4% in 2007, pipeline companies are showing renewed interest in the construction of high pressure natural gas pipelines throughout the U.S. As a result, the pipeline construction market is booming and new pipeline projects being announced almost daily. Some of the recently announced projects are being developed to provide access to major and prolific basins, while the aim of others is to relieve severe gas gathering and transportation constraints that burdened area natural gas producers.
Following is a brief rundown on several recently announced projects.
1,600-Mile Pipeline
If present schedules hold, the Mid-Continent Crossing pipeline will stretch from the Waha Hub near Plains, TX to the Oakford/Delmont, PA area and be in service by the 4Q 2008.
In a conference call with reporters, Byron Kelley, Group President, CenterPoint Energy CenterPoint Energy (NYSE: CNP) is an electric and natural gas utility serving several markets in the U.S. states of Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas.
..... Click the link for more information., Pipeline & Field Services, and Martha Wyrsch, President, Duke Energy Gas Transmission, explained the benefits of the proposed project.
Kelley said, "CEGT's initial open season for the Mid-Continent Crossing project was to solicit interest in a pipeline originating in Dumas, TX and terminating in Barton, AL. Based on the initial interest received during the open season, a clear message emerged from the marketplace that indicated we should consider a significant expansion of the scope of the original project in both the supply and market areas."
That's exactly what CEGT is proposing to do jointly with DEGT.
The proposed expanded pipeline, with a capacity of between 1.50 to 1.75 Bcf/d, will transport gas from points beginning near Plains, better known as Waha, TX, to an interconnection with Texas Eastern near Oakford/Delmont.
"Our market research shows that our overall gas consumption is going to continue to rise rapidly, particularly in the Southeast and Northeast markets," Kelley explained. "In these markets, customers are looking for security of supply. This project provides those markets in both the Southeast and Northeast access to a number of growing and reliable basins, including the Rockies, San Juan, Permian, Delaware, Granite Wash, Raton, Palo Duro, Anadarko, Arkoma and Fayetteville Shale."
Wyrsch noted that the MidContinent Crossing provides an important link for natural gas supply from these basins to reach the eastern markets.
"The eastern markets are premium markets," she said. "Markets that can support a significant increase in natural gas consumption and markets that will continue to grow when we can offer secure, long-term supply.
"Our customers are looking for supply diversification and access to reliable supply sources and producers are seeking outlets from these prolific supply basins. The Mid-Continent Crossing is a competitive alternative for producers to access these key markets and for customers in the Mid-west and East to access secure supply.
"One of of the key benefits of the planned pipeline is that it will follow both companies' existing rights of way for the majority of the route. It seems simple, but anyone building a pipeline today knows that working on existing rights of way is an invaluable advantage for anyone trying to build a greenfield project. As a result of this right-of-way advantage, we anticipate this pipeline should come to market faster and with minimal environmental, community and land-owner impacts," she said.
The non-binding open season for the MidContinent Crossing will run until July 31. Shippers seeking information on the project should contact Brian McKerlie (DEGT) at bmckerlie@duke-energy.com or 713-627-4582 or John Haynes at john.hayes@centerPointEnergy or 713-207-5130.
Southeast Supply Header
Also in recent weeks, the FERC FERC Federal Energy Regulatory Commission
FERC FEMA Emergency Response Capability approved plans by CEGT and DEGT to begin the prefiling process for the construction of approximately 270 miles of new 36-inch diameter natural gas pipeline as well as new compression from the Perryville Hub in northern Louisiana to the Gulfstream Natural Gas GulfStream Natural Gas is a natural gas pipeline that brings gas from Mississippi and Alabama, underwater across the Gulf of Mexico, to Florida. It is owned by Duke Energy. Its FERC code is 183.[1] External links
- Pipeline Electronic Bulletin Board
System near southern Mobile County, AL.
The proposed project, known as the Southeast Supply Header, would link the onshore natural gas supply basins of east Texas and northern Louisiana to Southeast markets now predominantly served by offshore natural gas supplies from the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico
Golfo de Mexico
Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east . This pipeline would give customers an important alternative to offshore supply, which can be vulnerable to weather-related service disruptions.
Along its route, the Southeast Supply Header would interconnect with several interstate natural gas pipelines, providing opportunities for supply to reach Mississippi and Alabama customers. The pipeline is anticipated to be in service in the summer of 2008.
KMP's Calnev Pipeline Expansion
Kinder Morgan Energy Partners Kinder Morgan Energy Partners LP NYSE: KMP (KMEP) owns or operates petroleum product, natural gas, and carbon dioxide pipelines, related storage facilities, terminals, power plants and retail natural gas in the United States and Canada. KMEP is a Master Limited Partnership. , L.P. recently approved the funding to begin engineering and design work to substantially expand the Calnev pipeline system, which would increase transportation capacity for gasoline, jet fuel and diesel to the rapidly growing Las Vegas market.
"The expansion would represent an investment of $300-400 million," said Tom Bannigan, president of KMP's Products Pipelines group. "The approved funding for the engineering and design work will be used to address route selection, permitting and right-of-way requirements, engineering, design and capital costs. Upon completion, the project would increase current capacity into Las Vegas by nearly 60% over the next four years."
The approximately 550-mile Calnev system, which originates in Colton, CA, has a current transportation capacity of about 140,000 bpd and features terminals in Barstow, CA and Las Vegas. In addition to the engineering and design work approved for this expansion, KMP KMP Kilusang Magbubukid ng Pilipinas (political group in the Philippines)
KMP Knuth-Morris-Pratt (string matching algorithm)
KMP Key Management Protocol
KMP Keep Me Posted
KMP Key Management Personnel continues to move forward with its previously announced plans to invest $25 million to install new and upgraded equipment and infrastructure on the Calnev system, including construction of two new 80,000-barrel storage tanks at the Las Vegas terminal. These projects will add approximately 16,000 bpd of incremental capacity on the Calnev system by late 2007.
$69 Million NGPL NGPL Natural Gas Plant Liquids
NGPL New Guinea Pacific Lines Expansion
Also, Kinder Morgan Inc., through its Natural Gas Pipeline Company of America Natural Gas Pipeline Company of America (NGPL) is a natural gas pipeline which brings gas from the Texas Permian Basin and Gulf of Mexico into the Chicago area. It has two legs, one which goes to New Mexico and the other of which goes to the Gulf of Mexico.
..... Click the link for more information. (NGPL) subsidiary, has entered into long-term, firm natural gas transportation contracts with shippers sufficient to proceed with an expansion project that will increase capacity on NGPL's Gulf Coast and Louisiana mainlines for delivery to the Henry Hub interconnect. The $69 million initiative, which involves adding compression and the installation of new piping, will increase capacity by 200,000 Dth/d.
"The expansion will provide valuable take-away take·a·way
n.
1. A concession, as in a lower level of health benefits, made by a labor union to a company in negotiating a new contract.
2. capacity for some of the most prolific and fastest growing producing areas in the country, including the Fayetteville Shale and Barnett Shale plays," said Scott Parker, president of KMI's Natural Gas Pipelines group. "By providing greater access to the Henry Hub and other interstate pipeline systems, the project will also enhance the ability of shippers to reach important consuming markets along the East Coast."
As part of the project, NGPL will install approximately 31,000 horsepower of compression and three miles of 36-inch diameter line looping. The scope of work also includes reconfiguring NGPL's compressor station 304 on the Gulf Coast mainline in Harrison County, TX, to allow the flow of natural gas southward into the Louisiana Line.
The Gulf Coast mainline, which extends to the Chicago area from south Texas, is one of the main arteries on the NGPL system and allows access to many of the major natural gas production areas in North America. The Louisiana Line, which originates at NGPL's Gulf Coast mainline in Montgomery County, TX, extends eastward, connecting to other major interstate systems and terminating at the Henry Hub. Capacity on the Louisiana Line is currently sold out. Subject to regulatory approvals, the project is expected to begin service in January 2008.
Chesapeake Utilities Plans To Boost Access To Natural Gas Supply
John R. Schimkaitis, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Chesapeake Utilities Corporation, said its wholly owned natural gas transmission subsidiary, Eastern Shore Natural Gas Company (ESNG ESNG Eastern Shore Natural Gas Company (US)
..... Click the link for more information.), has entered into agreements with two of its customers to expand the capacity of its interstate pipeline system by approximately 33%. The project would be ESNG's largest expansion since construction of the pipeline in 1959.
The agreements culminated three years of discussions between ESNG and customers regarding their interest in natural gas transportation service and access to additional supply sources. The project would bring an additional 60,000 Dth of natural gas capacity to the Delmarva Peninsula.
The project would include approximately 63 miles of pipeline that originates in Calvert County, MD, crosses the Chesapeake Bay into Dorchester and Caroline Counties, MD and then connects with ESNG's existing system in Sussex County, DE. The total project is expected to cost approximately $93 million, depending upon final design, construction materials and labor costs.
ESNG expects to begin the pre-filing process with the FERC later this year or early in 2007. New services are targeted to begin in late 2009. ESNG currently serves 12 industrial customers, three electric generation customers, four non-affiliated local distribution companies and two affiliated natural gas divisions. ESNG completed construction of the only natural gas pipeline (now more than 331 miles in length) on the Delmarva Peninsula in 1959.
Atmos Energy Subsidiary To Build $80 Million Gas Gathering System
Atmos Energy Corporation's Atmos Pipeline and Storage, LLC (Logical Link Control) See "LANs" under data link protocol.
LLC - Logical Link Control unit will seek exemption from regulatory oversight by the Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. for a natural gas gathering system it plans to build in eastern Kentucky. Atmos Energy said the new system should help relieve severe gas gathering and transportation constraints that historically have burdened natural gas producers in the area and should improve delivery reliability to natural gas customers.
Plans call for the proposed Straight Creek Gathering System to originate in Floyd County, and extend north approximately 50 miles to interconnect with the Tennessee Gas Pipeline Tennessee Gas Pipeline (TGPL) is a natural gas pipeline which runs from the Gulf of Mexico coast in Texas and Louisiana up through Arkansas, Kentucky, Tennessee, Ohio, and Pennsylvania to deliver gas in West Virginia, New Jersey, New York, and New England.
..... Click the link for more information. in Carter County. Tennessee Gas Pipeline's interstate system delivers natural gas to the Northeast, including New York City New York City: see New York, city.
New York City
City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S.
..... Click the link for more information. and Boston.
Initially, the 20-inch system will be capable of moving up to 100,000 MMBtu/d of gas, with the ability to expand throughput up to 225,000 MMBtu/d. Compression, treatment and processing facilities will be located at the northern end of the system, immediately upstream from the interconnection with Tennessee Gas Pipeline.
The project has an estimated cost of $75-80 million. Construction is expected to begin in the fall with operations likely to begin by the summer of 2007.
Joint Venture Pipeline Proposal
Boardwalk Pipeline Partners, LP Energy Transfer Partners LP and ONEOK Partners LP have signed a letter of intent regarding the formation of a joint venture to construct a new interstate pipeline originating in North Central Texas, crossing the states of Oklahoma, Arkansas and terminating in Coahoma County, MS at a new interconnect with Texas Gas Transmission Texas Gas Transmission is a natural gas pipeline which brings gas from the Louisiana Gulf coast up through Arkansas, Mississippi, Tennessee, and Kentucky, to supply gas to Illinois, Indiana, and Ohio. It is owned by Loews Corporation. Its FERC code is 18. LLC. The proposed project would have initial capacity of up to 1.0 Bcf/d. Together, the three sponsors collectively bring value to the project: Boardwalk with access to numerous markets in the Midwest, Northeast and Southeast through interconnects on Texas Gas and Gulf South; Energy Transfer and ONEOK Partners with extensive intrastate pipelines and gathering assets in Texas and Oklahoma.
The parties are also in discussions to commit to subscribing for substantial capacity in support of the project.
By Rita Tubb, Managin Editor
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