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Are You Ready, Part 2 - Early Impacts of Rover's Appalachian Natural Gas Flows to Michigan, Dawn

On June 1, Energy Transfer Partners’ new Rover Pipeline began service on its market segment from northwestern Ohio into southern Michigan, effectively sending nearly 800 MMcf/d of Marcellus/Utica gas production to Vector Pipeline and its northern destinations in Michigan, and, by extension, to the Dawn Hub. This latest in-service has already shuffled flows in the region and pushed back on other supplies targeting the same markets, including Canadian gas imports. And that’s even before the project has achieved its full expected capacity of 3.25 Bcf/d. Today, we analyze the early effects of Rover’s first flows to the Michigan/Dawn markets via Vector.

We’ve been following ETP’s 3.25-Bcf/d Rover Pipeline project closely in the RBN blogosphere, given its scale and potential for disrupting the Midwest, and even Canadian, gas markets. In fact, we’ve already seen some of that happening over the past eight months or so. The project has been phasing in since last fall, with each lateral and mainline capacity addition bringing on more supply. As we wrote in Against All Odds, initial service on the first portions of the Rover Pipeline began September 1, 2017, with just two of eight planned supply laterals online and partial capacity available on just one of its two mainlines (Mainline A). Within days of launching, the pipeline filled to capacity, which at that time was 700 MMcf/d. New compression was added in early October 2017, nearly doubling that capacity to 1.2 Bcf/d, and flows again jumped, this time to more than 1.0 Bcf/d for a bit. The additional takeaway capacity helped eastern Ohio gas production volumes reach new highs last fall, and as we discussed in Toe Bone Connected to the Foot Bone, regional gas flows started to shift in response to this new supply route, pushing more Marcellus/Utica gas toward the Midwest, where it could then turn south toward the Gulf Coast.

Flows dropped off through November 2017 and the first half of December, until the next pieces came online starting in mid-December (2017). Specifically, the project brought online still more compression and three new supply laterals, boosting Rover capacity by another 500 MMcf/d or so to 1.7 Bcf/d. With the addition of the new supply laterals, new shipper contracts kicked in and by February (2018), flows jumped to more than 1.5 Bcf/d.

At the time, full project completion was expected by the end of March 2018, which didn’t happen. But over the last month or so, Rover has been completing the final pieces of the project with federal approvals also coming in piecemeal. ETP is still awaiting approval on some final legs, but flows on the pipe jumped beginning June 1, as Rover received approval to begin service on two more segments of Mainline B, as well as the Supply Connector Line B, which connects the supply laterals to the mainline. Rover is still awaiting approval for two supply laterals — Burgettstown and Majorsville. But the June 1 in-service already has triggered some sizeable shifts downstream. Besides increasing flows on the mainline — to about 2.2 Bcf/d in June to date, from an average 1.6 Bcf/d in May (2018) — it also kick-started Rover’s deliveries to Vector Pipeline for the first time, which in turn has had a domino effect, not just along Vector, but on imports from Canada as a whole.

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