May 1, 2015 – Oil & Gas Investor
Incoming! Marcellus Pipelines To Strike The Gulf Coast Spot Price
By: Nissa Darbonne
Rusty Braziel spent most of his career figuring out how to get Midcontinent and Gulf Coast gas to the Northeast. “Now these guys don’t need it anymore,” Braziel noted in a recent ADAM-Houston meeting.
“Think about this,” he told the group, which consists of E&P M&A professionals. “This is Henry Hub, Louisiana…and the price in New York City is (some) $1.50 under that.
More than 40 existing pipelines and newbuilds are under way, Braziel said, to send Marcellus gas into New England (5.8 Bcf/d), Canada (1.2 Bcf/d), Chicago/Midwest (5.3 Bcf/d), the southern East Coast (7.7 Bcf/d) and the Gulf Coast (8.2 Bcf/d). Some of the Canada-bound lines aim to serve Great Lakes-area industries; at least one aims to reach New England via a Canadian route north of the Great Lakes.
“Imagine what the (western) Canadian (gas) producers think about that,” he said.
His slide that showed the number of pipelines under way to take Marcellus and Utica gas to the Gulf Coast drew a gasp from the audience. The 15, bold arrows were reminiscent of missile-strike scenarios of the Cold War days. “It’s headed straight to the Henry Hub…,” Braziel said. “All of them will probably be built; most of them have producer backing already.”
Meanwhile, gas from the Bakken, Midcontinent, Permian Basin and Eagle Ford is being directed to the Gulf Coast as well. “All of that gas has got to go to the Henry Hub (price). It’s going to be an interesting market for the next few years.”
Read the full story here: http://www.oilandgasinvestor.com/blog/incoming-marcellus-pipelines-strike-gulf-coast-spot-price-793846
