During the last two winters, New England natural gas prices reached levels rarely seen during the past 20 years, reaching $14.52 per million Btu (MMBtu) during December 2013 and peaking at more than $20/MMBtu in January, according to the U.S. Energy Information Administration (EIA). The two main pipelines transporting U.S. gas into the region were almost fully utilized, the EIA noted, suggesting that high prices in the region resulted from the lack of pipeline capacity.
Pipeline developers Tennessee Gas Pipeline Co. LLC (TGP)—a subsidiary of Kinder Morgan Energy Partners LP (KMP)—and Transcontinental Gas Pipeline Co. (Transco)—a Williams Partners LP subsidiary—have proposed projects to help remedy the insufficient capacity.
TGP recently reached agreements with local natural gas distribution companies in New England to transport about 500,000 dekatherms per day (Dth/d) of long-term firm transportation on the market path component of its planned Northeast Energy Direct Project. The project proposes an additional 346 miles of pipeline and modifications of existing laterals to increase delivery in Pennsylvania, New York and Massachusetts.
Transco announced a fully contracted, $150 million expansion project on its Transco Pipeline—the Garden State Expansion Project—which would distribute an additional 180,000 Dth/d along the Eastern Seaboard. The expansion is designed to increase gas transport reliability in areas along the New Jersey coast that were affected by Hurricane Sandy.
In a statement from KMP, Natural Gas Pipelines East Region President Kimberly S. Watson cited several studies estimating a need for up to 2 billion cubic feet per day of new pipeline capacity into New England and neighboring markets.
“TGP provides unmatched supply diversity, including access to the prolific Marcellus Shale, making the Northeast Energy Direct Project an ideal solution to satisfy rapidly growing natural gas demand that is forecasted in the Northeast and New England in the years ahead,” Watson said.
Caryn Livingston can be reached at clivingston@hartenergy.com or 713-260-6433.
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