Providing the capacity to transport Marcellus/Utica natural gas to and through the state of Texas to LNG export terminals and to Mexico will require pipeline reversals, new pipe and other enhancements along a combination of interstate and intrastate lines. In many ways, the long-distance part of the job––the reversal of large-diameter pipelines between the Northeast and the Lower Mississippi Valley––is the more straightforward; the greater challenge will be reworking the complicated pipeline networks between the Texas/Louisiana state line and the U.S./Mexico border. Today we review Texas pipeline projects being planned to allow increasing southbound flows of Northeast gas.
Reversing the direction of natural gas flows between the central/western Gulf Coast and the Northeast is a monumental task that will take a few more years––and a few billion more dollars––to complete. As we’ve covered extensively in the RBN blogosphere, the reconfiguring of key elements of the nation’s gas pipeline network is needed because of fundamental changes brought on by the Shale Revolution. Since 2008, the Marcellus/Utica shale region in Pennsylvania, Ohio and West Virginia has emerged as a gas-production powerhouse. Output from the three-state area now stands at an extraordinary 22 Bcf/d––nearly one-third of total U.S. production––and favorable production economics in the Marcellus/Utica play suggest that the region’s contribution will only increase through the early 2020s. Aside from U.S. power generation, the major centers of gas demand growth over the next several years are expected to be exports, both in the form of liquefied natural gas (LNG) shipped from new liquefaction/export facilities along the Texas/Louisiana coast and as pipeline gas to Mexico, most of it through existing and planned pipes in Texas. We’ve discussed the interstate pipeline reversals that will move increasing volumes of Marcellus/Utica gas to Louisiana in several blogs (most recently in Too Much Pipe on My Hands) and in the first two parts of our three-part Drill Down Report, “Miles and Miles of Texas,” which takes a big-picture look at U.S. LNG exports and pipeline gas deliveries to Mexico. We’ve looked at major enhancements to Texas’s intrastate pipeline systems in our ongoing Over, Under, Sideways, Down blog series, the initial episode of which focused on Kinder Morgan’s Tejas Crossover project, which will enable about 1 Bcf/d of natural gas to zig-zag over to and down the Texas coast to export markets. And we also covered the connections between Texas intrastate and interstate pipelines to the LNG export terminals being developed at Freeport and Corpus Christi in Last Mile of the Way.
This time we zero in on efforts to reverse the flow and/or expand the capacity of the Texas portion of interstate mainline pipelines. These pipes, which generally are part of much larger interstate systems that reach into the U.S. Northeast and Midwest, were originally designed and built generations ago to transport gas from Texas producers to gas users up north. Now, with reversals of interstate pipelines between Louisiana and the Marcellus/Utica coming online (and with Northeast-sourced gas flowing as far south as the Bayou State), these reversals and expansions of interstate pipes in Texas are needed to enable more and more gas to flow south to planned LNG export facilities in Freeport and Corpus Christi, TX, and to the Agua Dulce gas hub in Nueces County, TX, which has emerged as a major launching point for gas headed south of the border. The projects we’ll be discussing will be coming online over the next two and a half years or so; some southbound capacity will be added in a few weeks.