Eastbound Flow

Reversing the Rockies Express pipeline’s direction of flow would provide a huge outlet for natural gas producers in southwestern Pennsylvania, Ohio and West Virginia who are starting to see production constraints due to lack of take-away capacity. But REX’s plan to help move Utica and western Marcellus gas into the Midwest has some hurdles to clear.  And even if the reversal proceeds as planned, will it be enough to address the looming ramp-up in production?  Ironically, Rockies producers eight years ago faced a regional production surplus (and resulting price impact) similar to what their brethren in Utica/Marcellus are struggling with today.   

The Rockies Express pipeline (REX) will soon reverse its direction of flow.  Surely there is no more dramatic indication of the huge shifts in physical natural gas movements surging across North America. REX will be moving gas westward - out of the Marcellus/Utica plays into Midwest markets. Gas from the Rockies will go somewhere else. That’s certainly a good thing for Appalachian producers, who are facing (irony of ironies) exactly the same kind of pipeline capacity constraints that Rockies producers were dealing with eight years ago.  What can Marcellus/Utica producers learn from the Rockies experience?  What will the REX reversal do for Marcellus/Utica take-away capacity?  Will Rockies gas get back to where it once belonged?  We will explore these questions in this blog series addressing the REX reversal and implications for Marcellus/Utica producers.