With their scale and 130-gigawatt pipeline of new large-load customers, the planned combination of electric utility and wholesale power giants NextEra Energy and Dominion may substantially accelerate the buildout of new gas-fired power plants and, with that, the need for more pipeline capacity.
Constructing greenfield pipelines is never easy — just ask any midstream developer you know — but building them across the breadth of Texas comes with its own unique challenges. There’s distance, for starters, and today’s massive associated gas growth in the Permian Basin is occurring more than 400 miles from the closest demand along the Gulf Coast. That makes the pipelines relatively expensive at somewhere near $2 billion a copy. Integrating Permian supply with Gulf Coast demand also requires a big network of pipelines along the coast, as the demand is spread out from Louisiana to Mexico. Few midstream companies have such a network. Kinder Morgan does, one reason why, in our view, the Gulf Coast Express project was the first — and to-date the only — greenfield project from the Permian to proceed with a final investment decision. In the race to be the next Permian natural gas relief valve pipeline, the same hurdles will have to be overcome. On Friday, news came that a group of four companies is planning the Whistler Pipeline, and a closer look at the project reveals it may be capable of meeting the challenges needed to make it a serious player in the Permian pipeline race. Today, we look at the details of the latest Permian natural gas pipeline project.
Mexico’s power sector is one of three major demand centers U.S. natural gas producers and pipeline projects are targeting, the other two being the U.S. power sector and LNG exports. U.S. natural gas exports to Mexico are up 20% year-on-year in 2016 to date to nearly 3.5 Bcf/d––more than double the export volume five years ago––and are poised to soar past 6 Bcf/d by the end of the decade. Mexico’s energy operators are on a tear adding new natural gas-fired power generation capacity and building a sprawling network of natural gas transportation capacity. But delivering increasing volumes of U.S. natural gas to Mexico will require substantial changes on the U.S. side as well, particularly in Texas. Today, we continue our look at plans for adding pipeline export capacity along the Texas-Mexico border.
We talk a lot here in the RBN blogosphere about the bearish market effects of the Shale Revolution, and frequently highlight the U.S. Northeast natural gas region — rapidly growing gas production from the Marcellus/Utica; oversupplied, trapped-gas conditions; and resulting regional price discounts. These dynamics are driving massive investments in pipeline reversals, expansions and new capacity to move the gas to market. Northeast producers are counting on that increase in takeaway capacity to relieve price pressure and balance the market. But all this gas moving out of the region needs a home. Fortunately, new demand is emerging, from exports (to Mexico and overseas LNG) and into the U.S. power sector. One of the big growth regions is the U.S. Southeast, where power utilities are investing heavily in building out their fleet of gas-fired generation plants and are banking on this new, unfettered access to cheap Marcellus/Utica gas supply. Today’s blog provides an update on power generation projects coming up in the southern half of the Eastern Seaboard, based on a recent report by our good friends at Natural Gas Intelligence — “Southern Exposure: Gas-Fired Generators Rising in the Southeast; But Will Northeast Gas Show Up?”
The southern half of the Eastern Seaboard is a logical market for the natural gas surplus that will be flowing out of the Marcellus/Utica in coming years. Annual gas consumption in the fast-growing Maryland-to-Florida region now tops 8.7 Bcf/d and is rising quickly, largely due to the ongoing shift from coal-fired to gas-fired power generation. The region is close to major gas production areas in Pennsylvania, West Virginia and Ohio, and already has Williams’ Transco mainline, the gas-transportation equivalent of an eight-lane highway, as well as other Trunkline interstate pipes running right through it. In this episode of our series on moving gas out of the Marcellus/Utica, we look at pipeline projects Williams and others are planning to transport gas to Southeast consumers.
The idea of using natural gas produced in Pennsylvania to generate power in South Florida would have been considered implausible or even unthinkable just a few years ago. But now it seems likely that by mid-2017 Marcellus-sourced gas will, in fact, be moving deep into the Southeast. Williams’ planned Atlantic Sunrise project will make its Transco mainline bi-directional as far south as Station 85 in southwestern Alabama. From there, Spectra Energy and NextEra Energy’s Sabal Trail pipeline will move Marcellus and other gas into central Florida, and NextEra’s Florida Southeast Connection line will take gas still further south. Today In the second of a two part series, we conclude our analysis of the transformational Atlantic Sunrise project.
There will be no RBN blog published on Monday, January 20th in honor of the Martin Luther King holiday.
Spectra Energy and NextEra Energy’s planned Sabal Trail natural gas pipeline from near Transco Station 85 in southwestern Alabama to near Orlando in central Florida will do more than provide additional gas-delivery capacity to Florida and the welcomed redundancy of a third pipeline to the Sunshine State. The big news is that Williams’ Atlantic Sunrise project by July 2017 will enable large volumes of Marcellus-sourced gas to be shipped south (backwards!) along the Transco pipeline all the way to Station 85. That (and Sabal Trail) will give Marcellus producers something unthinkable until now: access to major gas users as far south as Miami. Today we lay out the basics of what is being planned.
