Ten weeks after an explosion crippled a key natural gas takeaway route out of the Marcellus/Utica, the capacity finally has been fully restored. Texas Eastern Transmission two days ago said it’s lifting all restrictions on the affected section of pipe. The outage began on January 21 and partial service resumed eight days later, but TETCO’s Northeast production receipts during the event averaged about 700 MMcf/d lower than usual and the line’s flows to the Gulf Coast were cut by 30-40%. That, along with two severe polar-vortex periods in January that overlapped with the outage, caused a reshuffling of flows across other pipelines in the region. Today, we wrap up this series with a look at the implications of the outage on the Northeast gas market and what to expect now that it’s ended.
Posts from Lindsay Schneider
The second wave of North American LNG export projects is officially underway. LNG Canada took final investment decision (FID) last October and would be the first large-scale LNG export facility in Canada. Golden Pass followed in February, marking the beginning of the next round of LNG export build on the U.S. Gulf Coast. Sabine Pass Train 6 is expected to get the green light any day, and at least eight more projects are targeting FID this year. But how likely are these projects to go ahead? And what exactly does it take for a project to reach that financial milestone? Today, we begin a two-part blog series on the factors affecting U.S. and Canadian LNG export projects’ prospects for taking FID and our view on the projects making progress towards joining the second wave of LNG exports.
In a world where Marcellus/Utica natural gas supplies and Gulf Coast gas demand are increasingly interdependent, what would happen if flows along a critical route connecting the two regions were disrupted? The market caught a glimpse of that on January 21, when an explosion on Texas Eastern Transmission’s 30-inch line in Noble County, OH, shut down flows through its Berne compressor, which serves as a key gateway for Gulf Coast-bound gas out of Appalachia. Partial service was restored a few days later, but a chunk of the capacity remains offline as repairs are completed, and southbound volumes are running at 60% of what they were prior to the outage. Not too long ago, an outage severing Northeast producers’ access to a major takeaway route to the Gulf would have hammered Northeast supply prices, even during the peak winter demand months. But as expansion projects have vastly improved pipeline connectivity within Appalachia and takeaway capacity out of the region, they’ve transformed how some of those legacy long-haul pipelines function and even the role they play in the market. The TETCO outage provides a glimpse into what that will mean for the Northeast and its downstream markets. In today’s blog, we begin a series looking at the implications of a well-connected Marcellus/Utica, starting with a recap of the TETCO event and its immediate impacts on southbound flows.