Without a doubt, the two biggest changes to U.S. natural gas markets in the last 15 years have been the Shale Revolution and the development of LNG exports. These completely upended the way gas flowed in this country, with the Northeast now home to the largest gas-producing basin and the Gulf Coast — including its fleet of LNG export terminals — now the U.S.’s largest demand center. Production growth in the Marcellus/Utica has stalled, however, largely due to the regulatory and legal challenges associated with building new pipeline takeaway capacity. One possible fix would be a new East Coast LNG terminal, which in addition to having easy access to cheap, almost-local gas would also be close to gas-hungry European markets. But just how likely is such a project? In today’s RBN blog, we discuss the advantages and hurdles of developing LNG export capacity on the East Coast.
The Mid-Atlantic region already has one LNG terminal, of course — Cove Point LNG, on the Chesapeake Bay in Maryland (yellow diamond in Figure 1) — and we should look at that facility in depth before we discuss the potential for a second LNG export terminal close to the Marcellus/Utica. Cove Point is a single-train, 5.25-MMtpa (700 MMcf/d) liquefaction-and-export facility owned by Berkshire Hathaway. All of its feedgas comes from the Marcellus/Utica via contracts with two area upstream producers, Coterra Energy in Northeast Pennsylvania and Antero Resources in Southwest Pennsylvania and West Virginia. The producers also manage gas transmission from the production area to Dominion Cove Pipeline (purple line), which feeds into the LNG terminal. [Feedgas flows from the supply area to Dominion Cove Pipeline via Transco Pipeline (orange line) and Columbia Gas Transmission (blue line).]
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