ANALYSIS-New U.S. pipelines to drive natural gas boom as exports surge

Wed Apr 12, 2017 5:28pm GMT

By Scott DiSavino

April 12 (Reuters) - U.S. energy firms are scrambling to finish a slew of pipelines that will unleash rich reserves of shale gas in Pennsylvania, West Virginia and Ohio as the nation prepares to become one of the world’s top natural gas exporters.

The pipelines are expected to boost output from shale fields in the three states by giving producers access to new domestic and international markets.

Those states could supply about a third of all U.S. natural gas once the pipeline expansion is complete, up from about 25 percent now, according to projections from the U.S. Energy Information Administration (EIA).

The network will bring cheaper fuel supplies for power generation and industry being built in the eastern half of Canada and the United States, especially along the U.S. Gulf Coast. It would also transport the huge volumes needed to feed facilities that chill the gas to liquid so it can be shipped internationally.

The construction addresses a lack of pipeline capacity that has stunted development of two of the largest shale fields in the United States, the Marcellus and Utica formations.

The lines should allow output to increase from both fields by about 50 percent in the next two years, according to the EIA. Gas from the Marcellus and Utica is among the cheapest in the country.

Among the largest projects under construction are Energy Transfer Partners LP's (ETP) Rover; TransCanada Corp's Leach XPress; and Williams Cos Inc's Atlantic Sunrise. Those lines will move gas out of these shale basins to markets in Canada, the U.S. Midwest and Southeast, including expected connections to Gulf Coast export terminals.

The completion of the lines will be a welcome boon for the firms and their investors after a tough couple of years. A slump in international energy prices led to reduced demand for new oil and gas pipeline capacity from producers.   Continued...

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