Over the past two years, natural gas production from the Appalachian region has soared with growth in the Marcellus pushing total production beyond 10.5 Bcf/d. Just next door the Utica Shale is coming into focus with attractive economics due to the natural gas liquids, crude oil and condensate production. The looming question is natural gas takeaway capacity. With Marcellus production continuing to grow and Utica supplies coming on, production in the Northeast will soon exceed regional consumption and will need to be moved out of the region to other markets in the U.S. and Canada. To accomplish this, new pipelines have been proposed and reversals of existing infrastructure that was originally built to transport gas into the region are being implemented. Today we review another of the proposed projects.
TransCanada
Natural gas imports into the Northeast US from Canada have fallen to around 1 Bcf/d from 3 Bcf/d in 2008. Infrastructure projects are underway or planned to replace Canadian supplies with gas from rapidly expanding Marcellus and Utica production. US gas is already flowing into Ontario at Niagara and will flow into Dawn if one or more Utica gas export projects are built. . Meantime the proposed Constitution pipeline from the Eastern Marcellus to New York would replace Canadian supplies into New York on the Iroquois pipeline. Today we review the next pieces of the reversal puzzle.
Canada imports as much as 2 Bcf/d of natural gas from the US in the region around the Dawn trading hub. The Dawn system has traditionally been fed by Western Canadian supplies and long haul pipelines from the US Gulf, Midwest and the Rockies. Marcellus gas can already reach Dawn via the border crossing at Niagara to the East. The Nexus Gas Transmission project will bring 1 Bcf/d directly into Dawn from the Utica. Today we detail the changing flows.
Canadian natural gas exports to the Northeast US fell from about 3Bcf/d in 2008 to around 1 Bcf/d in 2011 and have been at that level ever since. Last November significant US exports began to flow northward across the border into Canada at Niagara. Natural gas demand in Ontario is forecast to reach 3.25 Bcf/d by 2020. Today we describe how projects on the Canadian side will allow Marcellus gas to replace traditional Western Canadian supplies.
Canadian National Energy Board (NEB) data released earlier this month shows that the flow of natural gas imports across the US border at Niagara reversed to become exports for the first time in 2012. In the “old world” before Marcellus in 2008 - Canadian gas flowed into the US at an average 0.9 Bcf/d at Niagara. Last year those imports ground to a halt from May to October 2012 before reversing to 0.3 Bcf/d of exports to Canada in November. The reversal confirms that expanding Marcellus supplies are not just pushing Canadian imports back over the border but also starting to penetrate the Canadian market. Today we look at the dynamics of the Northeast gas flow reversal.
Mexico’s pipeline infrastructure is struggling to meet booming demand for cheap US natural gas imports across the Rio Grande. To open the way for increased flows of gas the state energy company PEMEX has launched an ambitious pipeline construction program on both sides of the border. Today we describe these pipeline projects.
Northeast bound interstate natural gas pipeline companies are busy reconfiguring their assets to accommodate significant supply growth expected by 2017. At the same time, regional natural gas supply and distribution companies are taking advantage of the opportunities that new local production brings.