Natural Gas Infrastructure Intelligence Report

September 2015, Vol. 242, No. 9

Colette Breshears, Aziza Dawaher and Laura Munder, Analysts, Genscape

In today’s commodity environment, being aware of ongoing decisions by producers and midstream players regarding planned projects is a critical component to understanding the future natural gas infrastructure landscape.

Experienced analysts collect and interpret the information to deliver a streamlined approach for understanding and quantifying the influence of planned projects on the market. Up-to-date, reliable insight into these decisions reduces blind spots for traders so they can make more informed, longer-term decisions.

Through summer 2015, Genscape is providing critical infrastructure intelligence alerts as they happen, including the tracked progress of processing plant, pipeline, and gathering line projects in the United States.

REX Flow East to West Increases as Seneca IV Likely Comes Online

In anticipation of the Aug. 1 start date for the Rockies Express (REX) east-to-west project approaches, flow on the pipeline ramped up. Fed from a combination of points in and around Clarington, OH as well as the powerhouse processing plant at the end of REX’s Seneca Lateral, flow in July exceeded 1.3 Bcf/d for the first time, and later in the month saw a further jump to above 1.4 Bcf/d.

When the full project begins to flow, westward-bound gas will fill the line to 1.8 Bcf/d, only about 400 MMcf/d above current flow.

The new flow came just after REX announced that partial east-to-west related service at the improved Chandlersville and Hamilton compressor stations had been approved by FERC and that bidirectional service there began July 9.

Since then, flow at both compressors has been steady, only filling above usual with a sudden increase that began July 12. Genscape is tentatively attributing this new strength of flow, which comes entirely from reported receipts on the Seneca Lateral, to the in-service of the fourth Seneca train.

MarkWest declined to confirm the status of the plant, but suggested that more details regarding Seneca IV will be announced in the near future.

The majority of the non-Seneca originating gas appeared to be re-routed from other pipelines or representative of production already accounted for, rather than representing an uptick of new production. Much of the push above 1.3 Bcf/d came from wells behind Rice’s new point at Gunslinger in Monroe County.

Genscape’s production forecast takes REX’s staggered phase-in into account, with only a small additional new production bump expected in August as REX’s east-to-west and Spectra’s Uniontown to Gas City projects relieve some export constraints in the region.

Transco Files with FERC for New York Bay Expansion Project

Transcontinental Gas Pipe Line Company (Transco), a subsidiary of Williams Partners, placed the Rockaway Lateral Project in-service in May. The effort involved constructing a delivery point in New York City by connecting the Lower New York Bay Lateral to the Rockaway Peninsula. That project provided National Grid with about 647 MMcf/d of firm transportation, giving the company the capability to serve more than 1 million customers in the area.

Now, Transco is back with another project, the New York Bay Expansion Project, which will provide National Grid with 115 MMcf/d of firm transportation, allowing National Grid enough natural gas to heat about 500,000 additional homes during the 2017 and 2018 winter months.

Transco filed with FERC on July 8 for a certificate of public convenience and necessity (CP15-527) for the project, designed to increase horsepower and modify three of Transco’s existing compressor stations, replace 0.25 miles of 42-inch pipeline and uprate pressure of the Lower New York Bay Lateral Pipeline.

The changes also include modifications to the Morgan and Narrows meter and regulating (M&R) stations, as well as installation of about 80 feet of 30-inch bypass pipe near the Downingtown M&R station. Construction is expected to begin in the fall of 2016 for an in-service date of Nov. 1, 2017.

Howard Energy Partners’ Nueva Era Pipeline Announced

Howard Energy Partners (HEP) announced plans to construct a 200-mile natural gas pipeline, directly connecting customers in the South Texas Eagle Ford Shale to customers in Northern Mexico.

The 30-inch Nueva Era pipeline will be capable of transporting 600 MMcf/d from HEP’s existing hub in Webb County, TX to Escobedo, Nuevo León, Mexico, and to the Mexican National Pipeline System (Sistema Nacional de Gasoductos) located in Monterrey.

HEP accepted non-binding indications of interest for transportation and processing services, which concluded July 17. HEP anticipates transportation rates from the U.S.-Mexico border to Escobedo to range from $0.13-0.20 per thousand cubic feet, subject to shippers’ specifications and Mexican legal requirements, including a Comisión Reguladora de Energía transportation permit. HEP expects the project to be in service July 2017.

The proposed project is in response to high customer demand to a previously announced solicitation of interest period held from May 21-June 12, 2015 for access to 1.2 Bcf/d of natural gas hub services and export from the Webb County hub to Mexico via the proposed Colombia interconnect.

In May, Impulsora Pipeline LLC, a wholly owned subsidiary of HEP, received a presidential permit from FERC authorizing construction plans of 36-inch pipeline to interconnect the Webb County hub with the Comisión Federal de Electricidad’s Colombia-Escobedo project (Colombia interconnect).

Texas Gas Transmission files for Reversal via Northern Supply Access

On June 5, Texas Gas Transmission submitted an application with FERC for the Northern Supply Access Project (CP15-513). The purpose of this project is to provide north-to-south natural gas transportation on Texas Gas’ existing system, while maintaining the current south-to-north flow. This would allow producers in Utica and Marcellus to access to markets in the Gulf Coast and Midwest regions.

The $149 million project would include modification of Texas Gas’ existing facilities in Indiana, Ohio, Kentucky, Tennessee and Mississippi as well as construction of a 23,877-hp compressor station in Hamilton County, OH. Construction is expected to begin April 1 for an in-service date of April 1, 2017.

Texas Gas Transmission, LLC has executed binding firm transportation agreements with eight companies for the full capacity of about 384 MMBtu/d: EdgeMarc Energy Holdings for 50,000 MMBtu/d; Indiana Gas for 15,000 MMBtu/d and 10,000 MMBtu/d; Jay-Bee Production for 50,000 MMBtu/d; R.E. Gas Development for 30,000 MMBtu/d; Southern Indiana Gas and Electric for 25,000 MMBtu/d; Triad Hunter for 100,000 MMBtu/d; Gulfport Energy for 54,000 MMBtu/d; and Kaiser Marketing Ohio for 50,000 MMBtu/d.

Texas Gas Transmission

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