Of all the demand markets in the U.S., the biggest prize eyed by Marcellus/Utica natural gas producers is the Gulf Coast region, where a combination of industrial demand, LNG exports and power generation projects is driving a need for more and more gas. And beyond the U.S. Gulf Coast states, there lies still another market capable of gobbling up even more of the excess Northeast gas supply: Mexico’s rapidly growing gas-fired generation sector ––that is, assuming pipelines in Texas can get it all the way there. There is over 4.0 Bcf/d of Marcellus/Utica-to-Gulf-Coast takeaway capacity planned to be completed over the next few years. Today, we look at the status and timing of Northeast pipeline takeaway projects targeting the Gulf Coast.
With the Northeast producing region hoping for access to close to 18 Bcf/d of incremental takeaway capacity over the next several years, the question now becomes, will there be too much takeaway capacity out of the Northeast? To answer this, we first looked in Part 1 at the RBN Northeast production outlook and prospects for supply growth under three commodity-price scenarios, concluding that efficiency gains and the uncompleted well inventory (DUCs) indicate that even the low production case will lead to at least some supply growth in the region. With that in mind, we turned our attention in Part 2 to upcoming takeaway capacity projects, organized into five outbound flow corridors that we defined for our analysis. Of the 24 projects RBN is tracking in our Midstream Infrastructure Database Interface (MIDI), six projects totaling 3.3 Bcf/d are headed to the New England and Mid-Atlantic states, or along what we call the East corridor; two projects adding up to 0.65 Bcf/d are planned for the Canadian corridor and four projects totaling 4.3 Bcf/d to the Midwest via Ohio (covered in Part 3);and four projects with a combined 5.2 Bcf/d to the Southeast along the Atlantic Coast are under development (see Part 4). We also started our examination of what some of this new gas supply will do to natural gas markets along the Gulf Coast in the first part of our latest Drill Down report titled I Saw Miles and Miles of Texas. Today, we look at each of the projects that will flow Marcellus/Utica gas along the fifth and final corridor — the Gulf Coast via Ohio, aka the Promised Land of future natural gas demand.
Pipelines to the Gulf Coast via Ohio
Several projects to enable southbound movement of significant volumes of Marcellus/Utica gas to industrial customers, power generators and export markets, including gas liquefaction facilities along the Gulf Coast have already become operational, and more are under construction or in advanced stages of development.