September 11, 2017 - Natural Gas Intelligence (NGI)
Rover Pipeline Start-Up Foreshadows Growth in Appalachia
By Jeremiah Shelor
Now that Energy Transfer Partners LP's (ETP) Rover Pipeline is officially up and running, offering more than 700 MMcf/d out of eastern Ohio, the market is getting its first taste of the project's potential impact on Appalachian production and pricing.
After receiving in-service authorization late last month and starting up its Phase 1A segment over Labor Day weekend, Rover was flowing just over 700 MMcf/d Monday from Cadiz, OH, to interconnects with Panhandle Eastern and ANR in Defiance, OH, according to NGI calculations using information from ETP...
Read the full article here: http://www.naturalgasintel.com/articles/111695-rover-pipeline-start-up-foreshadows-growth-in-appalachia
…With Rover kicking off a new round of pipeline expansions, Northeast producers have set their sights on growth through 2019, but there may not be enough demand to support these targets, according to a recent analysis from RBN Energy LLC.
Based on recent 2Q earnings calls, Marcellus and Utica producers "collectively say they anticipate a huge 14.5 Bcf/d of natural gas production growth by the end of 2019," RBN said, noting that this generally assumes a $3/MMBtu forward curve.
After factoring in associated gas from the Permian Basin and the Midcontinent, and from the Eagle Ford Shale, along with renewed interest in the Haynesville Shale and other plays, incremental U.S. production growth from the start of 2017 through the end of 2019 “could theoretically achieve a jaw-dropping 24 Bcf/d if producers do what they say they can do," according to RBN.
Even assuming these producer forecasts are overly optimistic, RBN said it projects demand to only grow by 13 Bcf/d over the same period.
"Building a Marcellus/Utica supply outlook from the producer level up reveals three key things," RBN said. "First, producers continue to expect large supply growth. Many producers in the Northeast are pure-play or heavily focused in the Marcellus and Utica" and do not have significant positions in other plays to reallocate investment. "Second, producers have committed more than $2.5 billion to long-haul pipeline expansions, not including any take-or-pay commitments they may have made to gathering and processing systems…
